Coffee futures are brewing again. Historically, the Coffee market has been a yo-yo — major Coffee bull markets followed by major bear markets, as shown by the quarterly graph below. The market has been trading in an area of historical support.
The weekly chart has been forming a rounding or complex H&S bottom. The right shoulder has taken the form of a symmetrical triangle. Coffee continues to form a possible rounding bottom on the weekly graph. This bottom is forming in the area of likely historical support. I believe the advance last Friday was a classic Wyckoff Sign-of-Strength (SOS) day, meaning it could prove to be the launch for the completion of the bottom.
The advance today has completed — at least intraday — the symmetrical triangle on the daily graph (red box).
Pending a close above 135.30, a major bull trend will commence in Coffee. The most likely profit target is 160, or the area of the 2014 lows. This is a HIGH RISK trade. Coffee ETNs include (NYSE:CAFE) and (NYSE:JO).
