Prediction
Aluminum prices are likely to decline over the next 2-4 weeks with Commercial Hedgers at a historically low 9th percentile and a 63-point divergence with Managed Money.
Commercial Hedgers at 9th percentile · Managed Money at 72th percentile · 5-year range.
Key points
- Commercial Hedgers — 9th percentile, Managed Money — 72nd percentile
- Open Interest 0.0% month-over-month
- Commercial Hedgers momentum -2.2% week-over-week
Why it matters
The smart money, Commercial Hedgers, are positioned at a low percentile, indicating a potential downside move, while the crowd, Managed Money, is at a relatively high percentile, setting up a potential reversal. Historically, such a large divergence between smart money and crowd has led to significant price moves, suggesting a potential decline in Aluminum prices.
What confirms the thesis
Commercial pressure stays elevated and Aluminum fails to reclaim recent resistance.
What invalidates the thesis
Commercial pressure fades quickly or Aluminum pushes through recent resistance.
For informational purposes only. Not investment advice. Disclaimer.