Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

US Dollar Index Has Broken Out

By

Commodities: Coffee looks poised for a huge bull market, and could break out soon.

PrintPRINT
The US Dollar Index has broken out to new year-to-date highs, and looks like it should trend higher into the 85 level. That level has been resistance for basically the past 3 years, so it could take some time to work through it. A pullback to 81 would be an ideal spot to add, but it seems like right now the US Dollar Index might just consolidate here above the breakout levels before taking another leg higher. Stay long!


Click to enlarge

The Japanese Yen has proven me wrong with the bullish USD environment, and it has started breaking to new lows. I thought the Yen would benefit alongside the USD in a risk off environment, but with equities breaking out to new highs, the Yen rolled back over after selling off near the 200 day. I'm staying flat this market for now, but will keep a close eye on the Yen if risk comes back off...


Click to enlarge

While I normally talk about currencies in these articles, I did want to highlight another futures related market that I think has a very interesting setup over the next year, and that is Coffee. Brazil is the largest world supplier of Coffee (about 33% of total world market) and they have had a huge drought this year. The Coffee harvest in Brazil is close to complete, and I believe over the next month or so the market is going to start realizing that Brazilian Coffee yields are going to be drastically below already lowered expectations. After a huge run earlier this year, Coffee has pulled back and consolidated over the past 3-4 months. The setup is developing for Coffee to start trending higher soon. The December contract is trading just below 2, and I don't think it goes much back below 1.80 this year. I think the potential upside could be well over 3, so you can see why I like this great risk reward setup! Coffee futures are pricey to margin, so you might play this through futures calls, or an equity investor could just buy one of the Coffee ETN's (JO seems the most liquid and best play to me)...Good luck out there!


Click to enlarge
< Previous
  • 1
Next >
Positions in DX, JO, KC, KC Options, MCD & MSF futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE