Mar Coffee

I gave my analysis on the continuation charts for Coffee, but here's the March futures contract.  Today we got a big bounce higher.  Could this be the start of the bottom? Remember, the commercials have a record long position, which is extremely bullish.  The question is not if, but when the market will have a big upward move.  I think it's sooner than later as I've put on two option trades:
11/14 bought 1 KC Mar 160 C @ 5.40
11/26 bought 2 KC Mar 150-162.50 C spread @ 3,112.50 debit
I'm a novice option trader to say the least so still experimenting, but too hard to buy futures on this trade setup.  I'm exploring options as a way to enter these specific trades as timing is difficult and can take a couple months to capture the big move.  These trades don't occur often, but when they do they can have explosive reversals.  Let's see what happens with this market the next couple months.

Mar Copper (update)

Copper hit resistance around where I figured: just below the 50 & 100 DMA plus the 6 point resistance line (which has now become 7 points).  We are seeing a real choppy move higher off the 11/9 lows, which is a sign of a weak uptrend.  The main obstacle in front is still those two moving averages and the resistance trendline.  If we can break above, then I can see a move to 3.64 for the next resistance zone.

mini Dow (update)

The past few days has seen this market stall just below the 50 and 100 DMA and now there's a 3 point downward sloping resistance line as well.  Today's action saw strong selling early into the previous resistance zone and then a snap back rally.  Old resistance became support.  If we get a break above the recent 12982 high tomorrow, then will we have a bullish ABCD pattern with shallow retracement and 3:1 right handed skewing.  I've pulled my original target 1 offers at 13025 and moved them to 13160.  If this pattern forms in the next 3 days the first upside target will be around 13350.  I would look to get out of another contract at that level.

Coffee (continuation chart)

A market to keep a real close eye on is Coffee.  This market has been selling off hard since the May 2011 highs.  However, according to the COT report the commercials are at record long levels and markets usually bottom when the smart money is at bullish extremes.  The hard part is the timing, which could be days or weeks away.  First, some interesting details supporting possible lows.  The monthly continuation chart shows an upward sloping trendline that has served as support numerous times since the Dec 2001 low.  Prices are getting near this area again.  Also, the RSI is oversold and hasn't been at this level since the 2001 bottom.  Could this be the area this market bounces from?  The weekly continuation chart currently shows a potential double bottom forming with bullish divergence on the RSI.  Finally, seasonally this market tends to bounce early Dec and rally into a May top with dips in Jan and Mar.  It could be too tough to time this market with futures so options might be a better play.  Options aren't my specialty, but I'm currently experimenting with them for COT based trade set-ups like this one.  I've put on a Mar bullish call spread (150-162.50 strikes) and will be looking for other possible trades in both options and futures in the next couple weeks.  I will show analyze the chart on the Mar futures contract this week.

mini Dow (update)

We were able to break through and hold the resistance level ~ 12750.  The only concern is that it was the day before and after Thanksgiving, which were both low volume days.  The upcoming week should give us a more valid indication of this market's recent strength.  First, on the positive side we closed above the 10 and 20 DMA, got a MACD bullish crossover, and broke above a downward sloping RSI trendline.  Second, some upcoming obstacles could be the 50 and 100 DMA, the monthly pivot @ 13185, and the swing high @ 13251.  My first target for exit is 13025, where I will get out of half my position.  My second target is just below the monthly pivot @ 13150, where I will exit one contract.  I will look to ride the final one lot with a trailing stop in case this market makes a run at new highs.

Mar Copper (Update)

OI has moved to the March contract, so we pick up the same pattern as the Dec contract.  New lows were never put in and a wider time range will form if those lows are breached.  Therefore, there are no more buy zone set-ups at lower levels.  However, this market is bouncing off an early support zone.  It wasn't an area I was comfortable buying into so I wanted to either wait for a candlestick pattern to form, see lower prices form by Nov 14th, or play a bounce above the Nov 13th high.  I ended up getting long on Nov 19th a tick above the Nov 13th high ~ 3.5090 with a stop below the recent lows ~ 3.4140.  Our initial target is the 78.60 retracement area ~ 3.755.  This buy set-up follows the logic that Copper traded into the first buy zone, but it wasn't supported by other indicators yet.  My ideal choice was to buy at lower prices, but after a few days of trading sideways and not making new lows caused some other supporting indicators to form.  These other indicators are: bullish crossover on the MACD, a bullish engulfing pattern, and a close above the 10 and 20 DMA.  Our first obstacle will be the 6pt downward sloping trendline that lines up with the 50 and 100 DMA.  I expect selling at this level.

mini Dow (update)

My long position had a nice follow through day after my entry, but stalled two days in a row at the resistance zone I mentioned the other day ~ 12750.  It will be interesting to see if we can break through this level or if we get a retracement instead.  I wouldn't be surprised to see a pullback.  It will be important for any pullback to be shallow otherwise a strong possibility of a retest of the lows exists.  Good news is we closed above the 10 DMA and we are closing in on a bullish crossover on the MACD.