I'm gonna start seeing just how adequate, or WRONG, the pure quantitative approach can achieve, using supply/demand data as predictive variables. I'm using mostly EIA data, production, refinery use, imports, exports, and COT producer, swap positions. Will probably add to this as we go. I also take suggestions. Current model outlook is about -0.7%~ in the coming week. Gonna try to track and update this every few days. Model details, graphs will be updated at https://bastion.substack.com/p/st-quantamental-price-fcast-of-wti
I recommend you start with a “building blocks” model based upon global growth growth. E.g. at what rate of gdp growth will demand = supply.
Understood, and thanks for pointing it out. That's one of the main reasons I decided to use the 2nd month expiration futures instead of front month.
oh yeah, thank you for the good point, I will definitely incorporate US Real GDP into it in the next iteration. I forgot to mention that I have short term change in M2 as a proxy for global growth in the current model. As far as deriving oil demand from GDP, I've seen a number of different delta estimates, between 30% to 50%. What do you suggest as a starting point?
My intuition, after observing CL for as long as I have, is to use 60/bbl as a baseline. It feels right.
...intuition ... I recently read on a thread from Sweet Bobby that your trading account performance was down 25% or 20%, or your fantasy journal was. No offense, but so much for your intuitive, 6'th sense, trading.
I have never posted a trading account performance percentage metric on my journal thread. Ever. It is right here for you to review, if you care to look through a real money journal thread that has been on this forum for over four years longer than you have been a member here. Go for it, dude! https://www.elitetrader.com/et/threads/and-they-have-a-plan-live.306838/
Probably not intuition. I think when our formulas are proprietary and want to stay polite instead of outright "and I'm not gonna tell you how I derived it...", a nicer way to express it is to say "that's just my feeling".