July Coffee (ICE-US) has carved out a nice tight rectangle after an extended down-trend.
On Monday (yesterday), this market started to act in a way that suggested it was ready to break the rectangle. Here is one day to play this break:
Short July Coffee (On the ICE-US futures exchange) at 130. Once filled, set a stop at 135.
Important Trade Management Note: If on the day of entry (i.e: the day of the break), price closes back inside the rectangle, I would suggest that you exit the trade immediately. The expectation is that this market will move rapidly away from the breakdown level. If it doesn't you don't want to stick around for a possible trap.
FYI: Coffee is 375.00 USD per point. So a move from 130.00 to 129.00 (on Tradestations chart) is $375.00 USD. On some platforms the decimal point on the price can be in a different location. For example, on IB, the price is quoted as 1.3000. Therefore, a move that goes from 1.30 to 1.29 is $375.00 USD.
Nigel Bahadur's normal market observations - usually about the US Futures market. Occasionally though, he will express thoughts on individual stocks and FOREX cross rates.