For those who don't follow the market closely, last year was a massive year for investors...30% rise in markets not driven by earnings, but earnings multiples or the number of times you multiply earnings to discover a price for a stock. There have also been dozens of Initial Public Offerings which have come to market that have priced at Tech Boom prices last seen in the late 1990's. Many took those gains, locked them in early in January, and shied away from more speculative equities, gone to US treasuries, driving down the yield to about 2.65%. (Coincidentally, Soft Commodities often move in the opposite direction to Treasury Yields)
Earlier this week I posted a tweet from my twitter account @ottotrader , indicating that $2.05 was a key level of resistance for the price of arabica. Technical analysts view this as a point where IF the price breaks through and settles above for a few days, the price will most likely go much higher. The price breached this level twice in the past couple of weeks, most recently on Thursday but retreated to $2.01 on Friday. Keep a close eye on this price for the most recent (kck14.nyb May) contract for an indication of where prices will go in the near term futures. Again, if it goes higher than $2.05 and stays there for a couple of days, hold on, we're going to go much higher, not because of shortages, drought or disease, but because of a movement to safety...physical things that large funds can hold until the equity markets settle down. While you're at it, watch the equity markets and US treasury Yields to see how they move in opposite direction to the Soft Commodities (including arabica) in times of uncertainty.
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