Hobofinance

Finance for those who care more about living than making a living

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Coffee Futures Options Trade Entry 12: A Glimmer of Hope

January 7th, 2009 · No Comments

Happy New Year Loyal Readers. 

Let’s hope today’s dramatic move is the end of the beginning.  These last few months have been a purging of all impurity from the markets.  Whether it represents an omniscient act of god, a sadistic act of satan or shiva, an indifferent and cosmically balanced act of nahuatl, or an account rebalancing by Jim Rogers, the carnage resulting from some incomprehensible power screwing with the natural order of things has finally ceased.  Or perhaps it is manifesting elsewhere…like in that 3 ton family on the discovery channel.  Come on people, stop eating.  No one needs an airlift to get a liposuction.  Nonetheless, Coffee has finally started to care about things like truth and nature again. 

By some mundane miracle we’re seeing signs of life.  We saw an 8 cent rally after a 3 cent down day, which brings us back into position to challenge resistance while at the same time breaching short term trend.  It’s a bit early to see whether this is a significant change in trend or merely a short squeeze (heavy and rapid buying which forces speculators who are short the market to cover their positions by buying back, causing a short term dramatic rally that feeds on itself), but that should become clear within a week or so.  Nonetheless it is the first promising development in the short term technical picture, as prices breached the trend line that dates back to October.  The long term trend line as of today would require prices to cross the $1.35 marker to verify a long term change.  But given the tight fundamental situation that 20 cent gap could be bridged quickly.

My current meager position includes:

Long 3 May 140 calls.  No cash.

That’s it… I covered the remaining short call I had as time was dragging on, and I didn’t want to wind up with another margin call should prices rally and settle just moderately higher over the next month.  This reduced my profit potential drastically, but it also reduced my risk drastically.  A hobo playing it safe…sinful.  Let’s see how this rally plays out the rest of the week.  If life comes back to this market, so too will it come back to this blog.  Peace out Hoboes.  Peace the fuck out.

Tags: Current Trades

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