Coffee: (20Dec) Coffee extended yesterday’s move but Volume barely budged. Some waning of interest is to be expected given the coming holidays. Additionally, even with the nice 2-day rally, the market still has to get through 225.00 just to get into the chart structure. This is the only Volatility on the higher than Standard Deviation list. Looks like short covering to us.
Seasonal Snapshot: The 5yr is more pronounced, but all three patterns have a positive bias until 19Dec when choppy consolidation takes over at the beginning of Feb.
Cotton: (20Dec) Easily the most disappointing of the tracked Softs. Failure is the name of this chart. Failure to make new highs and failure to settle higher. Of positive note, March didn’t make lower lows, so that’s supportive. Primary indicators are still negative. 200-day Moving Average still clearly falling.
Seasonal Snapshot: Moderate upward bias marches higher until year-end.
Sugar: (20Dec) A reasonably heavy day of Volume validate the move higher in March. Most of the best positive action and the biggest volume surge occurred immediately following the US Housing Starts data release.
A close look at the March chart action has the 2300 level showing as a significant support and resistance level; largely supportive at this point. If this level fails, materially lower levels are to be expected. The 200-day moving average (26.60) has been moving decidedly lower for a while and should cap any rallies.
Seasonal Snapshot: On 09Dec, the 5yr pattern kicked off the march higher in all three patterns until year end.
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