According to last weeks Commitment of Traders report (COT) which breaks down the total open interest as of each Tuesday’s settlement for markets held amongst three groups of traders (Commercials, Non-Commercials and Non-Reportables) showed that Commercial Hedgers more commonly known as Smart Money Hedgers are holding near extreme bearish exposure on Coffee which totalled -65,782 contracts (previous week -70,963).
At these extreme levels, commercials are important to watch as they have proven themselves over time to be correct at crucial turning points.
What’s interesting with this particular soft commodity is that the current turning point illustrated in the chart, where inside trendline support, 78.6 fib and ascending trendline junction at (1) contradicts the Smart Moneys near extreme bearish positioning. However, it’s our opinion that any downside relief at this triple support cluster will only provide better selling opportunities for the next leg down.
Non-Commercial traders trimmed their bullish net positions last week from the previous week by -4,598 contracts which now total 61,741 contracts. These large speculators are trend followers by definition and usually get it wrong at turning points, along with small speculators (Non-Reportables) which totalled a net position of 4,041 contracts, down -583 contracts reported the previous week (4,624 contracts).
At these extreme levels, commercials are important to watch as they have proven themselves over time to be correct at crucial turning points.
What’s interesting with this particular soft commodity is that the current turning point illustrated in the chart, where inside trendline support, 78.6 fib and ascending trendline junction at (1) contradicts the Smart Moneys near extreme bearish positioning. However, it’s our opinion that any downside relief at this triple support cluster will only provide better selling opportunities for the next leg down.
Non-Commercial traders trimmed their bullish net positions last week from the previous week by -4,598 contracts which now total 61,741 contracts. These large speculators are trend followers by definition and usually get it wrong at turning points, along with small speculators (Non-Reportables) which totalled a net position of 4,041 contracts, down -583 contracts reported the previous week (4,624 contracts).