Rally For Coffee? Cycles Suggest Very Likely

There are many tools available to us to make market predictions.  Cycle Analysis happens to be one of those tools.  Like any indicator, I don't just rely on one type or method.  What I'll do is get an initial indication from one of my most trusted methods and then see if some of the other indicators or tools/methods support the outlook.  From this I will form an 'opinion' and report on it.

So in respects with Coffee, I'm sitting at my desk putting together this week's FDate Report for my clients and notice that the LOW it made on Friday was at the very extreme of what I call the OS zone.  These 'zones' are plotted automatically on my price charts as a built-in tool of my Previsions Charting software.

A very high percentage of the time, when price moves into the 'zone' marked on the chart for the first time since leaving an opposing zone, you see the market move out of the zone in the opposite direction.  In other words, if price moves into the OS zone, the expectation is for price to 'rally' back out and head towards the OB zone.  So this is the start of my analysis on Coffee.

Now that the low in OS zone has got my attention, I must next see if there are any other indications of a likely rally.  There is!

Market Cycles are something I rely very heavily on in my analysis, having been using it for three decades now. I'll first take note whether the market in question has been moving somewhat in a predictable pattern based on the historical cycle pattern. If so, I have no reason to think it will stop now (although it could). 

Coffee has been nicely following a predictable pattern. For instance, I expected the turn for 11/20 which happened on time, and the following top which was just a day off on 11/30 (prediction 12/1).  Next is 12/11, although 12/8 is just ONE DAY early.

If the pattern is to hold, we should expect Coffee to be overall 'bullish' between now and 12/22. This does not mean a straight shot to the moon, as there are likely going to be up days and down days along the way. But overall, the outlook for Coffee heading towards 12/22 is a more sideways/bullish power to it (based on cycles) for the next several days.

Disclaimer: The analysis provided is not a recommendation or suggestion to buy or sell any commodity, index, or derivatives but for information purposes only. No trading advice is being offered or ...

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Michael Molman 6 years ago Contributor's comment

Interesting, do you see a potential upside for #coffee after 12/22, because I have been following it and it seems to me that there is very little upside long term.