Overview
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KC Arabica Coffee
Strategic
This week we call out where we stand in the big picture. The large spike discussed last week remains contained below the 350–380 resistance area, and so the bearish base case is retained until that resistance is breached. The projected decline is annotated in blue per standard Fibonacci targets; on the chart it does appear extreme. Accordingly, the bullish alternate count in orange remains entirely plausible. This sees the market as completing an ABC expanded flat correction, with higher to come. We will need to watch how the market resolves within this region before high conviction is available in the longer-term coffee outlook.
Tactical
The daily chart illustrates why caution remains warranted in this region. The move up off the June lows counts well as a five-wave impulse, denoted in orange. Subsequent price action could also be considered overlapping, which is consistent with corrective wave structure. Bears need KC to break below 280 to consider taking the alternate bullish case off the chart. This leaves us in no man’s land until the market provides further clues.
CT Cotton
Strategic
The long-term CT chart remains consistent with a bullish outlook into 2027. We are still forming the foundation for a breakout above the May 2026 high of 88.88. Expect a little backing and filling in this region before we see a breakout higher. The view is invalidated below 75.50.
Tactical
Over the week the market clarified CT’s short-term outlook somewhat, completing a micro five-wave move up off the 75.50 low. We are therefore counting the wave ii bottom as complete at that 50% retracement, with wave iii now in progress. Price is contained by a Fibonacci pivot area (blue box), which should trigger corrective action for a day or two. Next, we expect cotton to push higher in wave iii to the 92 region.
