COFFEE, CATTLE PART DEUX
AND A FEW MORE
NOVEMBER 11, 2019
COFFEE: Last week we recognized that the trend in Coffee had reversed to bullish as it had rallied ten dollars over a two week period. This quick ten dollar rally is why I am writing about Coffee once again. So according to the LAWG 647 Model what do we know? We know December Coffee is in an uptrend. We know that December Coffee needs to close at or below $77.65 on Friday, November 15 to turn bearish. We know that while that may be possible, it probably not likely. We know that as of the close last Friday (November 8) the positive indicator was above the fourth standard deviation of the long term average. This has put Coffee in Negative Equivalency. This means that the market has gone up so quickly as to become extremely long sided unbalanced. Over the last 220 weeks this is only the fourth time Coffee has reached a point of Negative Equivalency. But let us not forget that past performance is not indicative of future results. So what to do? We know that the model is strongly suggesting that we are near a short term top and ergo look for values to sell. At what price do I suggest one sell? You have to determine your risk tolerance. If you have the cajones and the money I would not wait a great deal longer. If the sizes of your wallet or cajones are not quite as large you may wish to wait until Coffee becomes further topside unbalanced.
CATTLE: Last week we addressed December Cattle becoming long side unbalanced and warned about being too aggressive if thinking about new long positions. So according to the LAWG 647 Model what do we know? We know December Cattle are in an uptrend. After flailing around December Cattle closed last Friday, November 8 down 27 cents, which has not eliminated being topside unbalanced. We know that December Cattle need to close at or below at or below $99.75 on Friday, November 15 to turn bearish. We know that while that may be possible, it probably not likely. So what to do? We know that as of the close last Friday (November 8) the positive indicator was above the fourth Standard deviation of the long term average but had not reached Negative Equivalency. This is the reason I am reluctant to be an aggressive seller in the immediate and I am willing to miss the market correction if it comes early. Those with greater risk tolerance I would suggest looking for nearby higher values to sell.
SILVER: December Silver turned bearish as of the close last Friday (November 8). It dropped over $1.20 cents in one week. So what do we know? We know that it will take a close at or above $19.082 this Friday to reverse the trend to bullish. While possible I do not believe that is probable. The negative indicator is now above the first standard deviation of the long term average. What to do? I recommend one look for values sell. If and when Silver reaches Positive Equivalency we will look for values to buy.
WORD TO THE WISE
Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.