Authored by Vittoria Onufrio via Halifax America

Let’s take a look at the following spread KCK18-KCN18 (Coffee)

The Spread Indicator entered the overbought level. The indicator crossed above 80 suggesting that the May 2018 coffee contract is weaker than the July 2018 contract. I would consider selling coffee May 2018 and buying coffee July 2018 before the closing of the market.

My trading ideas:
Sell coffee May 2018 and Buy coffee July 2018 before the closing of the market
Profit Target $100.00 before transaction costs
Stop loss $150.00 before transaction costs

If the market does not reach either the target or the stop, then exit on March 20, 2018

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