Cocoa

[bgold]

It's been a while since last Cocoa post. CC has been whipped around by funds and locals but may have made an intermediate low on 10March below 1400.
TA supporting factors are:
1. On daily chart, i see a bullish engulfing followed by rising window (today gapped open, a bit early to call it) which broke out of down channel, filliong a falling window dd 2March
2. Todays' trading reached top of bollinger band, possibly projecting follow thru.
3. On COT, Commercials are long albeit reduced during last week.
4. On hourly chart: Since 10/3 a pattern of 1 and 2's can be countedwhich might be breaking out into a 3rd of 3rd up.
5. and on hr chart, I see a channel today ranging between ~1498-1570

In summary, i opened a small initial long at 1511 targetting 1620-50 (target for today only 1570 , top of channel). Stop at 1498, just below yesterdays' close (perhaps a bit tight, but considering quite wide initial balance, I am not sure I would like CC to trade below todays' lows) The aboev may not be true if breaks down.
Good luck

 

[DaveT]

Cocoa daily and weekly charts are still in a choppy downtrend.

Fundamentals are bearish at the moment - but as always , weather (and instability in the lead producer ,Ivory Coast) could transform the Supply/demand equation in time...

I note in this weeks COT report that commercials are net long 20297 contracts.

Only Cocoa and Cotton are registering significant net long commercial positions in the commodities right now, as I read it.

Look at the Weekly chart below.

There is bullish momentum divergence and a falling wedge formation, as there was throughout 1999-2000, before the market took off on it's historic bull run.

An eventual turn-up is foreseeable. The divergence could perpetuate for another 6-9 months though...

I see 1150 as a possible ultimate low,( objective from the break of the steep uptrend-line, also strong support area..)

 

[neil]

A very clean and clear chart and succinct analysis.

Is that a standard Stoch at the bottom of your chart Dave?

 

[DaveT]

Thanks neil -

The Slow Stochastic parameters I've just 'tailored' to show momentum and it's moving average on a weekly chart.

(ie 26 week/ 52 week)

 

[The Baptist]

Cocoa Analysis

Hi Dave,

I too appreciated that analysis. I understand you to be pointing out that the last divergence lead to an interesting and substantial bull run.

Did you notice however that on the down side the 1150 proved good resistance from below, but made little impression as a support line in the initial drop below. Admitedly this was early on.

However in support of your hypothesis (assuming my initial understanding is correct) the down line on the falling wedge is acute to the 1150 level and could 'softly land' it around that mark in support. I will keep an eye on this, thanks to the interest all contributors have generated.

Nice one.
TB

 

[DaveT]

The Baptist -

You read my analysis correctly.

Regarding the 1150 support area - On the Weekly it is previouss resistance which may become support .

Actually if you look at the monthly continuation chart it shows up as 1200 and DOES go back further.

 

[DaveT]

Finally, for the VERY-LONG TERM PERSPECTIVE, (always helps)
look at this COCOA chart going back to 1966.

Note the down-trend channel from 1982, which broke out in 2002.
The upper trendline is showing some support (ie. previous resistance).

Technically, 2900 is the ultimate upside target for the breakout.
Where we are now could just be a 'return move' (?).

I see similarities with the early-to-mid 1970's, but the massive late-70's bull run was undoubtably inflation-induced, and was analagous to the behaviour of ALL commodities in that era.

 

[The Baptist]

Finally, for the VERY-LONG TERM PERSPECTIVE, (always helps)
look at this COCOA chart going back to 1966.

Note the down-trend channel from 1982, which broke out in 2002.
The upper trendline is showing some support (ie. previous resistance).

Technically, 2900 is the ultimate upside target for the breakout.
Where we are now could just be a 'return move' (?).

I see similarities with the early-to-mid 1970's, but the massive late-70's bull run was undoubtably inflation-induced, and was analagous to the behaviour of ALL commodities in that era.

Spot on. The new charts shows the significance of the 1200 level. Always nice to feel the big (old) Picture is in your favour. So much easier going with the flow of the market.

Enjoy turning it into profits.

 

[DaveT]

It's exactly one year today since I posted my Cocoa Weekly chart with (non-standard) Slow Stochastic.

Here is the same analysis brought up-to-date.

The long-term Falling Wedge broke out NORTH, and as is often the case with falling wedge breakouts, it is taking some time to follow through.

I expect weekly support to hold above the 1400 mark , (1300 is critical support).

My Slow stochastic remains in uptrend, and it's %D could provide support..

On the chart I compare the last few months range with the first half of 2001, before the big uptrend got underway. I I expect a test of 2100 resistance in the longer-term.

 

[bgold]

It's exactly one year today since I posted my Cocoa Weekly chart with (non-standard) Slow Stochastic.

Here is the same analysis brought up-to-date.

The long-term Falling Wedge broke out NORTH, and as is often the case with falling wedge breakouts, it is taking some time to follow through.

I expect weekly support to hold above the 1400 mark , (1300 is critical support).

My Slow stochastic remains in uptrend, and it's %D could provide support..

On the chart I compare the last few months range with the first half of 2001, before the big uptrend got underway. I I expect a test of 2100 resistance in the longer-term.

Took the plunge:

Long CC N5 @ 1445 stop @ 1415 initial target 1500
&
for possible swing

Long CC U5 @ 1462 stop @ 1435 target > 1500

 

[bgold]

Took the plunge:

Long CC N5 @ 1445 stop @ 1415 initial target 1500
&
for possible swing

Long CC U5 @ 1462 stop @ 1435 target > 1500

That was quick: Stopped

 

[DaveT]

Got LONG Sept NY Cocoa yesterday (13th June) at 1432. As this is a position trade, wide stop at 1379.

Targeting HUGE GAP at roughly 1700-1750.

1) 1420 held - potential double bottom - and gap up today.

2) Seasonal Chart shows annual low RIGHT NOW - in Mid-June.

3) Deadline for Ivory Coast disarmament is June 27th - not looking like this will hold - ongoing violence and killings.

4) July/August is weather-scare time for IC cocoa.

5) Likely market bull-run during run-up to October IC elections.

 

[DaveT]

Cocoa Seasonal Chart:

 

[DaveT]

Ivory Coast Rebels to Miss Deadline to Disarm
By Joe Bavier
Abidjan
13 June 2005

Bavier report (Real Player) - Download 402k
Listen to Bavier report (Real Player)


Ivory Coast's rebels say they will not begin disarming by the end of the month as required under a South African mediated peace deal. The decision puts a planned October presidential election in serious doubt as many now say there is not enough time to prepare.


Last month, the National Committee for Disarmament, Demobilization, and Reinsertion, known by its French acronym CNDDR, set a June 27 deadline for disarmament to begin. But a rebel spokesman, Amadou Kone said at a meeting with journalists in Abidjan the date is simply a proposal.

"This date is not our date. It is the CNDDR's date. And I think it will be difficult to start this process on the 27th of June," he said.

The rebels say the decision not to disarm was made in response to what they say is an increasingly tenuous security situation. They say they have no confidence in President Laurent Gbagbo's willingness to go to elections.

"Mr. Gbagbo will never win elections. The only thing he has to do is to restart the war," rebels said.

The rebels point to increasingly aggressive rhetoric from Mr. Gbagbo and members of his party, who have accused northern rebels of involvement in a series of attacks in the country's volatile west in recent weeks that have left dozens dead. Rebels deny any role, in turn accusing pro-Gbagbo militias.

Rebels say recent verbal attacks by Mr. Gbagbo and his supporters resemble those that preceded aerial bombardments on their positions last November.

In a speech broadcast on state-owned television last week, Mr. Gbagbo said that while he and his supporters waited for elections, others were blocking the disarmament process and continued to kill.

The October election timetable had already been dealt a blow last week when national assembly members from Mr. Gbagbo's political party, led by his wife Simone, walked out, saying they would not return until Prime Minister Seydou Diarra and his government had stepped down.

As part of the Pretoria peace accord, parliament is meant to revisit laws on nationality and the composition of an independent electoral commission before elections can take place.

An Member of Parliament for Ivory Coast's former longtime ruling party, known as the PDCI, Boa Thiemele says certain steps must be followed if the country's nearly three-year civil war is to be ended.

"We have to go through the electoral process, including the adoption of political measures at the national assembly and disarmament," said Boa Thiemele.

But Mr. Thiemele says, time is quickly running out, and the disarmament process, known locally as DDR, is an essential condition to holding elections.

"If, by the end of this month, we have nothing done on the DDR, we are sure that we are not going to elections," he said.

The Pretoria Accord, signed in April, is the end result of a drawn out peace process mediated in its latest phase by South African President Thabo Mbeki. Previous efforts at disarming northern rebels and southern pro-government militias have failed, largely due to mutual distrust.

 

[DaveT]

Ivory Coast rebels say president planning attack
13 Jun 2005 17:49:20 GMT

Source: Reuters

By Peter Murphy

ABIDJAN, June 13 (Reuters) - Ivory Coast's rebels said on Monday they believed President Laurent Gbagbo was preparing to attack their strongholds in the north of the West African nation, which has been divided since civil war erupted in 2002.

The declaration came after a spate of ethnic killings in the west of the world's top cocoa grower stoked simmering tensions between the civil war foes, casting a pall over a fragile peace process ahead of a disarmament deadline this month.

"We have some information showing that Gbagbo is preparing a certain number of things in order to restart hostilities," said Louis Dakoury-Tabley, a senior official in the rebel New Forces.

"At the moment it is too early for us to say (what these are)," he told reporters in the main city, Abidjan.

Army spokesman Lieutenant Colonel Jules Yao Yao said he had no comment to make on the rebel allegations.

Both sides frequently accuse each other of plotting to start all-out war again in the former French colony.

If anyone did so, they would have to reckon with thousands of U.N. and French troops patrolling a no-weapons buffer zone between the rebel-held north and government-run south.

However, Gbagbo's forces launched attacks on rebel positions in November after weeks of similar press speculation.

Hopes of an end to the conflict, which has killed thousands and threatened to spread turmoil across the volatile region, had been boosted by an April peace deal -- the latest in a string of accords -- signed by Gbagbo and the rebels in South Africa.

Afterwards, Gbagbo said presidential elections would be held on Oct. 30 and military chiefs from both sides agreed to start disarmament on June 27. Since then, however, some rebel leaders have denied they ever agreed a start date.

Ivory Coast's local newspapers, often used by rival political forces to drive public opinion, have been warning over the past few weeks that more fighting could break out.

Le Nouveau Reveil, an opposition paper, said on Monday Angolan mercenaries and weapons had just arrived in Abidjan.

"I don't know what that's based on. For us these are rumours. We will continue to remain vigilant," Yao Yao said.

Fears of fresh fighting have been on the rise since at least 100 people were killed in ethnic violence earlier this month in the western cocoa town of Duekoue.

Rebels and Gbagbo's camp blamed each other for provoking the killings. Analysts say both sides are using the violence as a pretext to avoid laying down their weapons on the June deadline.


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[DaveT]

September Cocoa Monthly Continuous Log Chart :

1) Shows long-term trendline successfully tested and holding.

2) Shows potential Key Reversal Bar for June - if current strength holds.

3) The whole 2003-2005 consolidation pahse could be seen as a large inverse Head and Shoulders Reversal pattern.

 

[DaveT]

Cocoa rockets - Spet tops 1500 in late trade.

Feeling very happy to have got LONG yesterday (sept )at 1429..

target 1700-1750 GAP.

 

[bgold]

Got LONG Sept NY Cocoa yesterday (13th June) at 1432. As this is a position trade, wide stop at 1379.

Targeting HUGE GAP at roughly 1700-1750.

1) 1420 held - potential double bottom - and gap up today.

2) Seasonal Chart shows annual low RIGHT NOW - in Mid-June.

3) Deadline for Ivory Coast disarmament is June 27th - not looking like this will hold - ongoing violence and killings.

4) July/August is weather-scare time for IC cocoa.

5) Likely market bull-run during run-up to October IC elections.

David, THANK YOU!
Read your post and realised I had not put alarms on CC and missed the break out. Would have been a shame especially as i jumped in last week which was a little early. Let me know when you are in London so I can buy you a drink/lunch/dinner?

Would you agree that this is a breakaway gap?

Long CC U5 @ 1467 stop @ 1436 (full position) target: open

 

[DaveT]

Hi Bgold -

Glad to have alerted you to the trade.

I'm not often in London, alas, but will certainly keep it in mind, if find myself in the capital in the near future.

Cheers!

 

[DaveT]

All going well here.


Spet NY Cocoa gapped UP $42 today, and so far it's holding, threatening to extend towards 1600.

Long from 1429-32 SEP
Targeting 1700-1763 GAP.