A Cup of Joe is Getting Cheaper
Geoffrey A. Smith
Java, a cup of Joe, coffee. Many enjoy the smell of fresh coffee in the morning. Coffee is one commodity that does not lose demand as prices move high, nor gain demand as prices move lower. People are willing to spend money for their morning fix, regardless of price. Back in June of 2010, coffee, along with corn, wheat, and cotton, began their trek upwards, doubling or tripling in price. In May of 2011, the rise peaked and prices began to fall. Some have come back to the prices of 2010, while others are not far from there. Coffee peaked out at 308.90 (was at 135.00 in 2010) and has been in a gradual decline ever since. Currently coffee is bouncing between 150-190.
The chart below is a daily chart of December coffee with a 3, 21, 65 simple moving average. As can be seen, coffee is currently in a down trend both the short term averages below the long term. Until coffee rises and stays above 173, it will remain bearish. The next 3 support levels are 156, 154 and 150. Historically, coffee has a tendency to rally in the month of November. Until then, barring news, coffee should continue its down trend.
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