September futures managed to hold yesterday’s low of 111 and while it did bounce, it never made it above 112.30. In fact 112.30, (referred to as resistance in my morning comment), was also where we saw some aggressive selling yesterday. A late rally attempt, short covering from day traders, did allow for some firmness prior to the close, but values never reached above 112. This inside day didn’t really provide anything new although it did serve to confirm that prices are now trending lower as indicated by the moving averages.
September had a range between 112.30 and 111.00, and settled outcry at 111.80?
Futures (outcry) 2,927 (electronic) 12,965, with 4,686 calls and 2,726 puts changing hands.
Technical: trend is down
Support: 110.55, 109.50-108.50, 106.40, 100.90,
Resistance: 112.30, 113.60-114, 114.50-115,
In September the 9 day moving average is 116.13, 18 day 117.14 the 40 day 113.94
Trading did seem to be unenthusiastic on the whole and relatively quiet in NY coffee dealings, especially in lieu of yesterday’s sharp decline.
Crystal Ball: There very well could be another bounce which should yield another selling opportunity. Therefore, I suggest looking to sell on moves that approach resistance beginning at 112-112.30 and continue adding to shorts on moves above 113. At this juncture only a close above 115.35 would be required to chase me off of the short side. My objective is for further weakness and a look for 106.50.
by Jurgens Bauer
trading floor: (212) 748-3898
cell: (973) 652-4694