Yesterday the spread between the value of one March cocoa futures contract and one March sugar futures contract closed at +$11,947.20 (premium cocoa). This put it below the rising weekly 10-day Moving Average for the first time in nearly five months, signaling a bearish trend change.
A hypothetical trade for the blog was triggered to sell one 10-ton March cocoa contract and buy one 112,000 lb. March sugar #11 contract at +$11,947.20 (premium cocoa). Initially, the exit strategy is to liquidate the spread on a two-consecutive day close above +$15,872.