Coffee?

I've noticed some interesting action in a coffee ETF that goes by the ticker JO. The first thing I noticed were the declines on low volume. Whenever I try to pick a bottom that is the first thing that I look for. To me it means that the selling is being done by habit, and that the urgency to sell is no longer there. It is usually after other bottom pickers have given up after a long decline. The lack of volume also has a tendency to make any big shorts nervous. They need volume to get out of their positions and a short covering rally can be sharp and vicious. (From a short's perspective)

The second thing I look for in a potential bottom is increased volume on the rallies. This may just be short covering, but coming after the declines in volume I would consider short covering the first part of a longer term rally.

For whatever reasons this chart of JO looks promising. It may be part of a coming inflationary trend.

The chart:

As always, put on a position slowly and on signs of continued strength. (To control risk)

UNG looking good. There will most likely be some consolidation or pullback from the $22.40 area here. But the next breakout MAY be after that. I would add some more after a rally above any consolidation of two weeks or more here...... Control risk. again.

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