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CHAPTER 3 - Understanding the Commercials > COFFEE 1987-1993
COFFEE 1987-1993
The long-term chart of coffee (see Figure 3.4) teaches the same lesson: it is the extremes in commercial selling that set up the best sell points as well as the extremes in buying, and we should not expect the extreme buying levels to be as far above the zero line as the extreme selling levels are below it. That’s the lesson to learn!
As you can see in Figure 3.4, the commercials were net short—they had more sells than longs—from 1987 through 1993 with the exception of one brief move to the long side—and an extreme—at the end of 1990. That coincided with one of the few rallies in this market during this seven-year window.