RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Fri’s bullish divergence in short-term momentum above 03-Oct’s 127.80 corrective high and the extent of the subsequent recovery that’s getting a little too long in the proverbial tooth to be considered a 4th-Wave within the sequence down from 18-Sep’s 143.25 high warrants the conclusion that Thur’s 124.30 low COMPLETED the decline from that mid-Sep high.  Moreover, the market’s gross failure to sustain early-Oct’s break below 06-Sep’s obviously key 126.75 low resurrects a major base/reversal count that contends the entire Aug-Oct sell-off attempt is a 3-wave and thus corrective structure.


Only a glance at the daily chart below is needed to see that, to this point, the relapse from 08-Aug’s 147.25 high is only a 3-wave affair as labeled.  Left unaltered by resumed weakness below 124.30, this 3-wave sell-off attempt may be considered a corrective affair that warns of a resumption of Jun-Aug’s uptrend that preceded it.

Coffee-Z17-Daily Chart

Coffee Weekly Continuation Close Chart

Taking even a bigger step back to consider the past couple years’ price action in the weekly close-only chart above and weekly log chart below, the combination of support from the lower-quarter of a multi-year range and historically bearish sentiment is certainly a compelling one for a base/reversal count that could be major in scope.

These issues considered, traders are advised to move to a bullish policy and first approach setback attempts to the 128.75-to-127.85-range as cautious corrective buying opportunities with a failure below 124.30 required to negate this call.  For shorter-term traders with tighter risk profiles, waiting for proof of 3-wave, corrective behavior on such a setback and a bullish divergence in very short-term mo to stem that setback is advised to identify a tighter but objective risk parameter to a bullish punt.

Coffee Weekly Continuation Chart

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