KCK14 – May Coffee (Last:208.90)

Although coffee futures have been in a powerful bull move this year, they became a speculative short last week when buyers first tussled with the 214.30 midpoint Hidden Pivot (red line) shown.  The subsequent pullback was tradable, but it remains to be seen how long profit-taking will slow this vehicle down. That’s assuming the current chop is corrective rather than terminal. Although we cannot be absolutely certain the bull market will continue, I can say with a high degree of confidence that if and when 214.30 is decisively exceeded, the future will follow through to at least 262.60, and then pull back precisely from that number, a Hidden Pivot resistance. The rally would amount to a 25% gain from these levels, and if it happens it will be interesting to see how much of the hit Starbuck’s passes on to its customers.