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Showing posts with label COFFEE. Show all posts
Showing posts with label COFFEE. Show all posts

Sunday, December 21, 2014

Elliott Wave Analysis of Coffee (JO) Update

Its been a few weeks since my last article see here:


As i wrote back then, the bull trap was something I felt most traders would be tricked into buying and so it seems to be true. Slowly its moving nicely towards the target area of 30, although I want to see KC (Coffee contract) also make a new low as both markets are still short of their respective targets.

Once we meet those target i think both KC and JO will offer a nice setup to buy, most likely right at the time most traders will give up. That's usually the way it seems, but for others to be successful other need to suffer pain.

Elliott Wave is a great method for identifying potential traps, Elliott Wave could have saved the bulls the pain of getting caught up with the hysteria i was reading at the time. The bulls really did get sucked into the hysteria.

However the good news is the pain should be close to ending, its then bullish traders can look to re-buy again. Hopefully by the time members look to buy, many will be disgusted and be bearish this market.

Sunday, October 12, 2014

Elliott Wave Analysis of Coffee (JO)

Back in April I issued a couple of warnings on StockTwits that a significant pullback was setting up, I was targeting the $32.00 area, which around the 50% retracement of the prior rally

See here: http://stocktwits.com/message/22165570

And here: http://stocktwits.com/message/22388553

As you can see those charts nailed the top and bottom near $32.00, virtually to the tick and that warning was very real. I noticed at the time that  sentiment was very bullish, which is usually the case when a market makes a 5th wave, yet those that understand price action were the ones trying to "get out" as most traders/investors were trying to "get in".

Such is the way with the markets, most are bullish at the top and bearish at the lows.

I am now issuing another warning for those that wish to listen. Sentiment is once again bullish and many are expecting the market to race higher, but i urge some caution here as a suspect this maybe a "B wave trap".

The move from the lows in Jul 2014 appear to have a 3 wave look, further more the measured move target where the 2nd up leg equals the 1st leg sits at around 43. Hence it could be a B wave of a flat pattern.

If the market finds trouble at 43 and we see a strong reversal back under 37.00 I fear traders will again buying a bull trap just as they bought the Apr 2014 highs only to see it crash 50%.

In order to confirm a strong 3rd wave to the upside, the bulls need to see a strong gap up over 44.00 and blast higher, failing that i suspect the bulls maybe disappointed.

A bit of patience here could save you making a big mistake buying the market.

If a 3rd wave to the upside you will have plenty of time to get on board as there will be plenty of upside.