Nagual's pitchfork resistance level, as always, proved solid. Tango has pointed out the origin selling as far out as Sept'23. Origin selling, IMO, should not be ignored.
Does that mean the rally is over? I still see further upside potential to challenge some of the levels seen in September. It seems a lot will be determined by the how aggressive the algo's will be. COT report should be interesting this week.
Many external factors remain. With Covid shutdowns again on the rise, what impact will that have on the market? Will the adverse weather in Central America promote any lingering impact on the crops (i.e coffee rust) ? What about Brazil ? We see Wolthers Brazil (both arabica and robusta) at 56M. Will be curious to see where this fits in as other estimates eventually are made public. All of this should make for an interesting KC market as we head into 2021.
Quick note on Gold. GCZ20 touched the 1,850 level I mentioned in my weekend post. I would look for another attempt to break below the 1,850-1,848 level. From there the market to me becomes one to watch as there are some key downside support levels that in my opinion would present good opportunities on the long side. Still some room before we get there, but worth watching. To this point, the 1,850 has proven to be very strong support. Let's see if that remains the case.