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After a 200% rally in Coffee futures between 2009 and 2011, investors grew to love coffee, hitting a 90% bullish reading near Coffee's top! Boy were the bulls in for it, as Coffee proceeded to lose 50% of its value in 18 months. Was this a crowded trade? FOR SURE!!!
Investors might like Coffee in the morning, yet when it comes to sentiment readings, very few are bullish Coffee right now. Current readings stand at just 15% Bulls, one of the lowest readings in years. Articles are easy to find in regards to record short positions that are in place in Coffee right now. Line (1) in the chart above, represents a 7-year support line, that has seen some decent Coffee rallies take place off of.
The bulls formed a crowded trade in Coffee 18 months ago and got creamed. Have the bears formed a crowded trade and about to get creamed too?