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Coffee and Cattle


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COFFEE AND CATTLE

November 6, 2019

COFFEE: As we mentioned last week there was an excellent chance that Coffee could reverse to an uptrend. Well indeed as of the close Friday last (November 1) December Coffee did indeed reverse from the long term downtrend to an uptrend. So as of now according to the LAWG 647 Model what do we know?

We know that Coffee is in an uptrend and needs a close this Friday (November 8) at or below $89.05 to reverse back to bearish. While possible. I suggest not likely. Looking forward over the next several weeks it appears to me that it will be equally difficult for Coffee to reverse to bearish. We know that as of Friday last the Positive Indicator had exceeded the first standard deviation of the 218 week average. As of this writing the Positive Indicator is just short to reaching the second standard deviation of the 218 week average. Over the past 218 weeks the Positive Indicator has reached the second standard deviation eight times and exceeded it six times, but as we know past performance is not indicative of future results.

What to do? I am suggesting one look for values to get long but as Warren Buffet once said it isnt where you sell something it is where you bought it that matters. Looking at the Coffee market it appears there is a bunching of technical support levels between $102.00 and $105.00. If you are looking to get long Coffee assess your risk tolerance and pick your poison and use stop loss orders for protection.

My name is Lee Gaus and if you would like to see the rest of the report go to our website ifgfutures.com. There you will also find articles written by my partners Tom Fritz, Steve Erdman and myself. If you have any questions you can reach me at 1-877-304-1369, 312-384-1166, or email me atlee@efggrp.com. If there is a commodity you would like me to address shoot me an email.

There is significant risk involved in trading futures and/or options on futures. Futures and/or options of futures trading may not be suitable for all investors. Investors should consider these risks and evaluate their suitability based on their financial conditions. Past performance is not indicative of future results.



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About the author


Lee A. Gaus is a forty year veteran of the commodity futures industry.  After graduation from Illinois State University Lee began his professional career with Cargill of Minneapolis and then moved to Archer Daniels Midland of Decatur, Illinois.  After stints in the areas of animal nutrition, soybean processing and grain merchandizing Lee began specializing in commodity futures trading.  After being transferred to Chicago Gaus rose to the position of Senior Vice-President.  In 1992 Gaus was a founding member of EFG Group, and later International Futures Group.  Gaus has always had a deep interest in what appears to be the random movement of numbers.   Today Gaus combines old formulas with formulas of his own design in an attempt to discover fair valuations.  

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