We have an interesting spread between copper and oil, with the ratio chart showing signs of outperformance in Copper, relative to Oil today. We might be at a local bottom for this ratio, which paves the way for AUDCAD longs, as well as trading Copper and Oil futures/CFDs as a pair, going long Copper, whilst simultaneously going short Oil. This is a very interesting signal, so keep an eye out for the effects of it. Check related ideas for the previous signal' results.
Cheers,
Ivan Labrie.
Komen
⋅
Copper initiated the move.
Komen
⋅
Check it out...this is why we monitor correlations, inter-commodity and inter-currency spreads, and fundamentals, not only technicals.
Dagangan ditutup secara manual
⋅
This is a good exit for the pair trade in copper/oil.
Komen
⋅
Close to a 2 sigma move using a 1 year linear regression here.
If anyone is still in, it might be good to bail asap.
You NAILED that low in copper Ivan. Awesome work! I see I "liked it" right away back then too. Great job.
IvanLabrie
⋅
@timwest, that was a great signal back then. Interesting trend in AUDCAD also, which is a proxy for the pair trade. I would short AUDCAD now maybe.
The_Observer
⋅
Thanks for sharing. Interesting. I do as well follow wti oil futures closely.
From a random blog;
"Oil accounts for 7% of the marginal cost of copper production (assuming oil other variables remain unchanged), therefore a plunge in oil should cause the marginal cost of copper production to fall further."
IvanLabrie
⋅
Yes, this is why this pair trade is so good, among other reasons.
The rally in iron ore is leading here, and copper will follow, and probably oil now as well.
The_Observer
⋅
Let's hope so, I've been long on wtioil for a while, and will stay so at least to after next OPEC meeting in late Nov. Anyway wtioil price should fundamentally rebalance and stabilize now sooner or later at somewhat higher, 50-60$ is my guess.
IvanLabrie
⋅
Yes I think so too.
When did you enter?
The_Observer
⋅
In early June16 :P Wti oil futures. We got a top there in mid Aug, but I let them be waiting for more upside. As my charts suggests, as well as fundamental analyzes suggest, there should be more upside potential.
Regarding my chart, if they should be right, ABC correction usually ends near the origin of last impulsive wave 4...
piptamil
⋅
Thanks Ivan.
Very good comparative charts.
purpurato59
⋅
I am interested on these ratios, but do not know exactly how to interpret them. I do keep an eye on the Gold / Oil that seems to be on a support line and ready to go up.