I didn't make any reference to spreads, but thanks for bringing that up. How you use correlations with spread trading depends on whether you are trading relative strength (trend) vs mean reversion (traditional pairs trading). Since bone and his clients trade relative strength, let's stick with that. Put in the simplest terms, correlation tells how often both price series move in the same direction. It doesn't tell you anything about the magnitude of the moves. So you could have a perfectly correlated pair (always moves in the same direction) and make a profitable spread trade if you correctly predict the relative strength.
Bone I am interested in your service. I think being taught by a successful Trader is great and $7,500.00 isn't too much to pay. It only takes a few Trades to cover the $7,500.00 fee, also the $7,500.00 will also be offset against profits at the end of the tax year. I don't understand why more of your Elitetrader students don't post on this thread after they have completed the course with their views.
I am more than happy to provide client references, and much earlier in this thread and in others students indeed have posted their views. Unfortunately, they in turn get trolled and drowned out. In fact, several of my clients brave enough to post in the past have told me that they have been privately IM'd with offers for materials and training outside of my client NDA agreement.
Now this is just my philosophy - but all I am looking for is convergence or divergence. In other words, there are dislocations in the forward curve induced by commercial order flows. Especially as you transition from the Demand aspect of the curve to the Supply aspect of the forward curve. Doesn't really matter to me if it's a calendar or a butterfly or a condor intramarket or intermarket.
Interesting. I wonder if you can separate commodities into two categories ... those whose future supply is typically held in storage (e.g., oil which is subject to geopolitical forces), and those whose future supply has yet to be produced (e.g., grains which are subject to weather) and make any observations about the dislocations being different for one category vs the other?