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U.S. Market Forecast – Tis The Season To Drink & Own Coffee

December 30th, 2012 · Chris Vermeulen · 2 Comments

Coffee prices have fallen more than 50% since 2010 which can be seen through the coffee exchange traded fund symbol: JO. This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.

Weekly, Hourly and Seasonal chart of JO Coffee Exchange Traded Fund

The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on balance volume meaning big money is slowly building a long position in coffee. The small white chart is the seasonal chart of coffee futures showing prices historically rise from Jan  – March, then a correction followed by another rally in to May.

Coffee prices are still in a down trend but it looks as though the end is near and if played properly it could provide up to 100% return on your capital in 2013.

Dec28JO

Coffee Futures Monthly Long Term Chart

This chart gives you a bird’s eye view on where coffee prices are trading in the big picture scheme of things.

CoffeeLongTermMonthly

JO Coffee ETF VS. SBUX Starbucks Share Price:

Lower coffee bean prices has helped lift share prices of coffee companies like Starbucks: SBUX, Coffee Holdings Co.: JVA, Coffee Roasters Inc.: GMCR, and PEET’s Coffee: PEET. But cheap coffee may not be around that much longer and the lower earnings for coffee brewers may be closer than most may think.

Follow my Live Trading Charts Here Free: https://stockcharts.com/public/1992897

CoffeeBrewer

2013 Caffeine Conclusion:

In short, I have been watching coffee prices for a bottoming pattern for months and I now feel it is getting really close to a bottom and it could be a great trade and investment in the new year. As for companies like Starbucks it will likely not have much of an affect on the bottom line until the second half of the year though it is something to keep an eye on during earning seasons.

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2 responses so far ↓

  • 1 Biker // Jun 4, 2013 at 9:55 am

    Recent research, indicating that coffee-in-excess creates a build-up of fat around vital organs, may in fact reduce consumption.

    Maybe we should be monitoring the price of tea… 😉

  • 2 Biker // Jun 4, 2013 at 10:09 am

    And, while we’re examining US Market Forecasts, it’s interesting that way back in 1990, the US Executive Director of the American Motorcycle Group, Ed Lemco, predicted the demise of two of the Big Four Japanese motorcycle manufacturers:

    “Two of the Japanese manufacturers will get out of the business if they can save face while doing so. The Japanese are not emotionally in the motorcycle business. They’re huge multinational conglomerates that happen to still be in the motorcycle business. But in this business emotional commitment is everything.” Cycle World, March 1990.

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