Authored by Vittoria Onufrio, Senior Broker, Halifax America

Let’s take a look at the following spread KCZ17-KCH18 (Coffee spread)

The Spread Indicator entered the overbought level. The indicator crossed above 80 suggesting that the December 2017 Coffee contract is weaker than the March 2018 contract. I would consider selling Coffee December 2017 and buying Coffee March 2018 before the closing of the market, setting my stop loss to $200.00.

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