SAMPLE:
Cu3M Relationships: Related Markets Ten Day Forecast Zone Summary
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Cu3M Relationships: Dynamic and Static Equilibrium “Current Fair Value” Summary
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Second Market: Related Markets Ten Day Forecast Zone Summary
Commentary
This sheet collects all the results from the relative market analysis on daily charts and a weighted model is constructed. The results are shown in the density plot on the bottom right.
Related Market Analysis
Description of Summary charts.
The bar chart on the lower left shows the equilibrium levels (grey bars) for all the relative markets. (The price that Cu3M would be if it were on the Equilibrium line (best straight line) in the scatterdiagram of Cu3M vs the relative market). The horizontal red line shows the last Cu3M price. The horizontal black lines form the relative market forecast zone which shows where Cu3M is expected to trade in the next five days from the relative market analysis..
The bar chart on the upper left
The equilibrium spread is the difference of the Cu3M price and the price that it would be if it were on the equilibrium line. The best straight line through the equilibrium spread through time is the Target line with the Upper and Lower lines, acting as support and resistance 1 standard deviation above and below.
The target price is the price of Cu3m corresponding to the last point of the target line.
The chart shows the target prices (mid point) and the target support (dark blue) and target resistance levels (cyan) for all the relative markets.The horizontal red line shows the last Cu3M price. The horizontal black lines form the related market forecast zone which shows where the Cu3M is expected to trade in the next five days from the relative market analysis.
The chart on the bottom right shows the weighted Cu3M relative markets model levels as a density plot. The Target levels as blue, the Target support and resistance levels as cyan lines and the equilibrium levels as grey lines. These act like relative market support and resistance levels. The vertical red line shows the last Cu3M price. The vertical black lines form the relative market forecast zone which shows where the Cu3M is expected to trade in the next five days from the relative market analysis.
The table on the top right shows the equilibrium,target and target support and resistance values for all the relative markets as well as the weighted model.
Models based on fundamentals with an index fund component
Price Dynamics Limited would be delighted to produce traditional style medium and long-term price forecasts based on traditional fundamentals for customers covering those exchange-traded or non-exchange traded commodities that are not ‘investible’ by index funds or, on any significant scale, influenced by the specialist hedge funds.
We can also produce medium and long-term forecasts for the ‘investible’ commodities for our clients in either of two ways, as the client wishes. One route is to treat investments by index funds and net long or short positions of hedge funds as fundamentals in their own right, and incorporate them into a hybrid physical-investment market model. This route would work best if the customer were themselves able to track, approximately at least, hedge funds’ net positions in the futures and physical markets, something which we believe a growing number of financial organisations and mining majors are now doing. The other route is to work just with traditional fundamentals and treat investment effects as anomalies.
Signal Setups 