Today, March coffee closed down 455 points at 1.1445. Depending upon how you look at the market, today marks the sixth straight down day for March. However, last Friday March closed higher than Thursday’s close. If you look at the market with a candle stick presentation, a down day occurs when the market closes lower than the opening rather than lower than the day before.
Something happened last Thursday, Friday, and today that does not normally happen. On Thursday March open down or, as the trader say, gapped down, which means that there were no connecting trades. March closed at 1.1995 on Wednesday, but open on Thursday at 1.1905, down 90 points. On Friday the market opened gapped up 135 points. And then today March opened gapped down 105 points. Gaps in the trading occur when the bid or ask are more than 5 points from the previous sale. The big gaps that we have seen during the last three openings suggest extremely heavy volume in one direction or another at the opening.
I have attached two reports both of which are bearish. The first report forecasts Brazil’s crop size to be bigger than anticipated. The second report says that coffee pricing is still being influence by a strong dollar and a weak Brazilian Real.
The coffee market does have a way of making life interesting (or frustration?).