Sandals ZCJB Thick Woman clindamy-19310 Summer Sports : Shoes B07CDW4RVK Flat Bottom Students Casual Shoes (Color : Style2, Size : 38) B07CDW4RVK Parent 003b53b

Sandals ZCJB Thick Woman clindamy-19310 Summer Sports : Shoes B07CDW4RVK Flat Bottom Students Casual Shoes (Color : Style2, Size : 38) B07CDW4RVK Parent 003b53b -

While 2016 fades in the rear-view mirror, market trends from last year will continue to play an important role in 2017. Therefore, analyzing and understanding data from 2016 may help get your portfolio best positioned for the new trading year.

For example, both gold and crude oil experienced significant (and possibly unexpected) price action during 2016.

In fact, it wasn't that long ago that a slide in crude oil threatened to take down worldwide equity prices when prices slumped below $30/barrel in February 2016.

After bouncing ever-so-slightly due to reduced global production (improving supply/demand equation), crude oil truly took flight when OPEC started discussing (and ultimately agreeing upon) a coordinated supply cut. Due in large part to this OPEC activity, crude oil marked its biggest annual gain since 2009 as West Texas Intermediate (WTI) rose 45% during 2016.

With the oil cartel's production cuts scheduled to kick off at the start of 2017, the direction of oil prices in early 2017 will be largely dictated by OPEC's adherence to the deal. Worldwide oil production data for January of 2017 should be available in early February.

While gold prices followed a similar upward trend alongside crude oil for the bulk of 2016, this well-known commodity reversed course dramatically during the last couple months of last year. The early bullish trend in gold was likely due to the US Federal Reserve's decision to hold off on an interest rate hike throughout the first three-quarters of the year.

Likewise, the drop in gold prices at the end of 2016 was related to expectations (later proven correct) that the US Federal Reserve would raise rates at their December meeting. With the Fed guiding for three more increases in benchmark interest rates in 2017, gold prices movement in 2017 will hinge to a great degree on the actions of the US central bank.

Generally speaking, rising interest rates catalyze a strengthening US Dollar, which in turn weakens gold. However, gold prices can also be affected by perceived threats to the global economy (i.e. "flight to safety) and other factors.

It's possible you've already mapped out a plan for 2017 in crude oil and/or gold that fits your existing portfolio, outlook, and risk profile. However, if you are still considering new ideas for the coming year, a recent episode of Closing the Gap - Futures Edition may be a great place to start.

On the show, hosts Tom Sosnoff, Tony Battista, and futures expert Pete Mulmat outline a pairs trading idea that involves crude oil and gold futures. While the show includes a wide-ranging discussion on both commodities, the crux of the rational for the the trade involves the "Gold/Crude Ratio."

Obviously, picking the direction of either commodity over the course of 2017 is extremely difficult. That's why the trade detailed on Closing the Gap is deployed using a reference point that measures the historical relationship between the prices of the two commodities.

The Gold/Crude Ratio is calculated by dividing the current price of crude oil into the current price of gold. With gold currently trading about $1152/ounce and crude oil trading $54/barrel, that means the Gold/Crude Ratio currently stands at roughly 21 (1152/54 = 21).

As you can see in the graphic below, the current value of the Gold/Crude Ratio is somewhat depressed compared to recent history:

Sandals ZCJB Thick Woman clindamy-19310 Summer Sports : Shoes B07CDW4RVK Flat Bottom Students Casual Shoes (Color : Style2, Size : 38) B07CDW4RVK Parent 003b53b -
Gabor Women's, Chic, Ankle Boots B01EPE4OKS Parent , adidas Originals Women's Shoes | Equipment Support Adv Fashion Sneakers, Off White/Legacy/White, (8.5 M US) Parent B01HJB1Z24D.A.T.E Women Shoes STARDUST WGOLD DATE Size 37 EU Parent B01EYXF738 , The spring and summer fashion tip high-heeled bow tie size code hollow female sandals Parent B07CP2R6YZNIKE WMNS Roshe One PRM Womens 833928-800 Parent B07G8T6GS6 , GTVERNH Super High Heel 9Cm Thin Heel Toes Rome Leisure Sandals Waterproof Tables Buckles Beach Shoes Summer. B07FG1WMGN Parent , GTVERNH Comfort/women's shoes/Summer Fashion 12Cm Super High Heel One Word Drag Female Anti Slip Thick Bottom... B07FLQQYK3 Parent , Under Armour Thrill 2, Women’s Running Shoes B018F4B1UA ParentDYF Shoes Butterfly Knot Round Head Flat Bottom Shallow Mouth Metal Buckle,Dark Blue,43 B076H35M7C Parent , CRUZ Boots Woman 3 UK/ 36 EU Black Leather B074CL2XDJ Parent , WDYY Leather High-top Martin Boots British Pointed Tie Business Dress Ankle Boots B07H8FS46R ParentMen/Women Seychelles womens Reserved B06XF1911F Parent Many varieties Upper material Popular tide shoes , RAZAMAZA Women Classic Block Heel Zip Boots B07HG4DC2Q Parent , Lamoda Womens Open Toe Ankle Boots in Khaki Lycra 6 B07DW9YRRC Parent , The Flexx B254/06 Ankle Boot Women B01LW4O064 ParentEllie Shoes Women's 609-Scrunch Ankle Bootie B071CKXFWT Parent , Loeffler Randall Women's Sal Slide Sandal B01N4G0DAR Parent , New Look Women’'s 3794882 Open-Toe Heels B01MY1HTU6 Parent , WEIQI-Women's Sandals/Summer/Key Buckle/with Platform/Rhinestone Heel, Party/Work, 12cm, 32-42 B07D1ZY6R4 ParentRieker Women's 63478 Women Open Toe Sandals B017MLD5QA Parent , Shanxi Yaoyao Yeye Trading Co, Ltd. Leather Sandals Summer Rhinestone Female Sandals Thick Heel Open Toe Simple... B07GBY39Z2 Parent , ZCW Casual Versatile Shoes,Muffins Thick-Soled Sandals in the Summer, of Sequined Shoes,Casual Wedges Women'S... B07H2X6XRJ Parent , Peter Kaiser Women's High Heel Sling Back Sandal B01K7CU9YM Parent , Unisa Sandals and Slippers for Women, Colour Blue, Brand, Model Sandals and Slippers for Women MABRE PA Blue B07BFXY43Z Parent , Dream Vintage High Heels Summer Sexy Fish Mouth Open Toe Sandals Elegant Wedding Shoes Comfortable Work Shoes... B074RHGN5S ParentJSHOE Women's Dance Shoes Latin Salsa/Tango/Tea/Samba/Modern/Jazz Shoes Sandals High Heels,Gold-heeled7.5cm-UK3... B078W7TGV4 ParentXZGC A Slope With Sandals Female Dew-Beaded Beach Shoes,4 UK,Black B07BT11859 ParentBalaMasa Womens Fringed Mini-Size Fashion Urethane Sandals ASL05080 B07F637QQX Parent , AalarDom Womens Open-Toe Low-Heels Soft Materials Solid Buckle Sandals B072P5V96C Parent , Emily Bridal Ivory Bridal Shoes Crystal Kitten Heel Sandals Women's T Strap Open Toe Evening Shoes B07C26GW1W Parent ,

According to the above data, traders expecting a reversal in the Gold/Crude ratio could express their opinion by purchasing gold futures and simultaneously selling crude oil futures. Obviously, the ratio goes higher (i.e. the trade wins) when either gold prices move higher, when oil prices move lower, or both.

For a complete explanation of this trade we hope you'll take the time to review the full episode of Closing the Gap - Futures Edition focused on pairs trading these two global commodities.

While this trade structure may not fit your current portfolio and/or risk profile, it's possible that ever-changing market conditions may make it look more favorable at some point in the future.

If you have any questions about futures or any other trading topic, we hope you'll reach out at

In the meantime, we wish you all the best for a great new year!

Sage Anderson has an extensive background trading equity derivatives and managing volatility-based portfolios. He has traded hundreds of thousands of contracts across the spectrum of industries in the single-stock universe.

Sandals ZCJB Thick Woman clindamy-19310 Summer Sports : Shoes B07CDW4RVK Flat Bottom Students Casual Shoes (Color : Style2, Size : 38) B07CDW4RVK Parent 003b53b -

Sandals ZCJB Thick Woman clindamy-19310 Summer Sports : Shoes B07CDW4RVK Flat Bottom Students Casual Shoes (Color : Style2, Size : 38) B07CDW4RVK Parent 003b53b Shoes