BalaMasa Womens Shoes 9254 Bows Beaded Solid Solid Urethane Pumps Shoes APL10716 B07GTR9PYR Parent 4c326ac

BalaMasa Womens Shoes 9254 Bows Beaded Solid Solid Urethane Pumps Shoes APL10716 B07GTR9PYR Parent 4c326ac -

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:

BalaMasa Womens Shoes 9254 Bows Beaded Solid Solid Urethane Pumps Shoes APL10716 B07GTR9PYR Parent 4c326ac -
AWESAMA Women Comfort Adjustable Straps Beach Shoes,Dress Sandals,Sports Sandals B07DMB23N3 Parent , Wooden Slats Design Ladies Flip Flops UK Shoe 4-8 / Euro 37-41 (XFFS029) Parent B0123O87EGWomen Sandals NEW Summer Casual Bohemia Flat Women Shoes New Fashion Beach Sandals Solid Casual Shoes Parent B073ZGMYFR , NBHYGTHU Summer Bohemia Flower Women Sandals Clip Toe Sandals Beach Shoes Convenience (Color : White, Size : One... B07H89F51W ParentGrunland PA1201 KAMP PANTOF. Donna SINT. Parent B07BHLBSFY , Kenneth Cole Women’s Allyson Trainers Parent B075KW4C2KRTRY Women'S Sandals Summer Comfort Pvc Casual Flat Heel Bowknot Black Red Blue Champagne Walking Champagne Us9... Parent B074CWXB3HRUGAI-UE Stylish Fish Mouth Super High Heels Word With Fine With Color Sandals Parent B072MCJ975Skechers Sport Afterburn Strike Memory Foam Hook-and-Loop Sneaker Parent B00R2DYY3MHeavenly Feet Demi Womens Ladies Sandals Rose - Rose - UK Sizes 3-8 B07GNP6L6T ParentSaucony Women's Progrid Echelon 3 Running Shoe B006N01H94 Parent , Neosens Women’s S298 Restored Skin Wood/Baladi Ankle Boots B072LCWCB2 Parent , Josef Seibel Women’s Sandra 04 Boots, Sangria/Wine B01064QUE4 Parent , Fashion Thirsty Ladies Womens Cut Out Over The Knee Thigh HIGH Stiletto Heels Boots Sandals Size B07D12SXBH ParentAGECC Women’s Boots Comfortable Beautiful Durable Autumn And Winter With High Coarse Thick Non Slip Bottom Pointed... B07HP21C8X Parent1TO9 Womens Buckle Tassels Chunky Heels Suede Pumps Shoes B0751HWMG1 Parent , Tamaris Women’s 22465 Closed Toe Heels, Black, 3 UK B01FX96ZD8 Parent , Gabor 93.100.37 Temptation Black Patent Womens Pumps B078H7TFVS Parent , Spot On Mid Heel Inside Waisted Peeptoe Court / Little Studs B00BD4ABE2 Parent , Ellie Shoes Women's 8401 Pump B002OFDO02 Parent , ZBeiBei Women's Sandals Peep Toe Buckle Glitter High Heels Wedding Shoes B07C3NBM98 Parent , Aldo Women’s Elvyne Ankle Strap Sandals B01M3NMPFY ParentHavaianas Womens Slim Princess Flip Flops B015582OZU Parentyalanshop High-Heeled Sandals Female Fine With Waterproof Single Women Shoes Dew, Green 39 B07C9YTBJ4 ParentZHXUANXUAN 2018 New Summer Comfortable Thick with Student Sandals B07FHZ2GR5 ParentJSHOE Women's Salsa Tango Ballroom Latin Dance Shoes Party Dance Shoes Sandals High Heels,Purple-heeled7.5cm-UK3.5... B0796NDDJD Parent , adidas Women's Flip Flops black black B01826KUXK Parent , Hyun Times Pink Summer Women's Shoes With A Waterproof Sandals Printed High-Heeled Shoes B07BQYZZZ8 ParentKitzen Women's High Heel Sandals Open Toe Ladies Pump Shoes Ankle Strap Fashion Wedding Party Roman Style 9Cm B07DNWNL4Y Parent , Allhqfashion Women's Solid Buckle Open-Toe High-Heels Sandals, Gold, 34 B07GJNQVJD 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.

BalaMasa Womens Shoes 9254 Bows Beaded Solid Solid Urethane Pumps Shoes APL10716 B07GTR9PYR Parent 4c326ac -

BalaMasa Womens Shoes 9254 Bows Beaded Solid Solid Urethane Pumps Shoes APL10716 B07GTR9PYR Parent 4c326ac Shoes