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Coffee Price – falling into 18 month trough soon

Coffee Arabica

Coffee (Arabica) looks good for a fall into an 18 month trough over the next couple of weeks or so. Here is the long term picture:

KC 05-15_daily_07_02_2015

There was a trough of at least 18 month magnitude on November the 6th 2013 (probably 54 month) and the cyclical picture looks clear with defined 40 and 20 week trough placements. I believe this commodity is in the last 40 day cycle before the major trough. So, a chance for firstly a short trade into the 18 month low which should be swift and profitable, then a long out of the major trough. Lets take a closer look:

KC 05-15_daily_07_02_2015closeThe 18 month FLD is providing resistance to price and there is also the 20 week VTL which should not be broken. Shorts around this area would be wise I think. Price should definitely not break the previous 18 month low. If it does I will have to reassess this analysis.

The 18 month trough is due to occur in early March where I will look for a break of the 20 day VTL/FLD or 10 day to get long. The underlying trend is bullish as this will be the 2nd 18 month cycle of 3 in the 54 month cycle (3:1 harmonic ratio). The first 18 month cycle projection was overshot massively so I would expect the high of 228 made on the 6th of October 2014 to be surpassed.

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