Dust Off the Keurig, Time to Buy Some Coffee

• Posted by Greg Harmon
• on January 14th, 2014

The market for Coffee ($KC_F, $JO) has been a disaster since I can remember. It has been so bad for so long that it has offered multiple opportunities to try to trade a reversal that have failed. I count 6 in the last 15 months. When a market gets like this it takes a very strong confirmation for me to get interested. This confirmation may be about to happen in Coffee. It has bounced off of a bottom at 101 and been rising since late November. But it is back at the 200 day Simple Moving Average (SMA) for the first time since October 2012. And what did it do then? It failed and fell 55% over the next 12 months. The last time that Coffee closed over the 200 day SMA was in September of 2011. A close over this level is a big

deal. And it has a positive set up as it sits there just underneath. It is consolidating in a symmetrical triangle using the 200 day SMA as the top. A break over the triangle carries a Measured move higher to 126 and then 127.50. This would be solidly over the 200 day SMA. With a Rising Relative Strength Index (RSI) and MACD, this should be enough to get involved. Will it happen this time or will it be just another time that the market takes your money?

Don’t forget to download A Longer Perspective, my take on 12 broad markets for 2014 and beyond, for the price of a latte.

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