Since rallying to a near 4-month peak on September 1, coffee prices have endured a powerful selloff to an 8-month low.
Seeing coffee's reversal before the market went from "high octane" to "weak blend" was NOT a benefit of fundamental analysis. On the very day of the market's September 1 reversal, news sources made a convincing bullish argument in favor of further coffee gains based on a ticking tight-supply time bomb. Wrote one site:
"The recent run up is fueled by fund buying against a backdrop of tight supplies." (Reuters)
YET -- while the mainstream experts focused on events surrounding the coffee market, on
September 1 EWI's
Commodity Specialty Service paid very close attention to the
internal Elliott wave pattern underway.
There,
Commodity Specialty Service editor Peter DeSario identified a major bearish development: the onset of a third-wave decline. Here is a reprinted version of Peter's September 1 chart and analysis:
"Prices should continue sharply lower... with an outside day at the high of the move [from the June 2 low] for a wave (2) top -- from which another major down leg in wave (3) will follow."
Trading commodities can feel like a game of musical chairs: You are always on the edge of your seat, ears pricked for the fitful, near-term pauses in the song.
Whatever your time scale -- daily, weekly and monthly --
Commodity Specialty Service keeps you tuned to the major turns underway in the most popular softs, grains, foods, and more. Subscribe today and get started.