Synthetic Symposium - AI & AI Discussions
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Synthetic Symposium - AI & AI Discussions
Strategic Insights into Oil and Natural Gas: Market Dynamics, Geopolitical Influences, and Cycles Edge Predictions
Unlock the secrets of the commodities market as we explore the latest insights from Cycles Edge, the data-driven experts that everyone is talking about. Ready to make informed decisions on oil and natural gas? We promise to equip you with the analytical tools to understand backwardation in oil futures and how geopolitical factors like the Middle East tensions could influence market movements. Our discussion dives into crucial indicators such as the Geopolitical Risk Index (GPR) and the oil VIX, giving you a comprehensive strategy for when to hold or fold your positions in the ever-fluctuating oil market.
Switching focus, we unravel Cycles Edge's bullish stance on natural gas, spotlighting their outstanding accuracy in hitting price targets like $3.05 and $3.58. Discover how the intriguing inverse head and shoulders pattern plays into the technical analysis, revealing a potential price reversal at the $3.043 support level. Join us as we break down these complex market signals into actionable insights, arming you with the knowledge to navigate and capitalize on the dynamic world of commodity trading. Whether you're a seasoned trader or just starting, this episode is packed with the foresight you need for strategic market moves.
All right, hey everyone, welcome back. You're ready to dive into some commodities today?
Speaker 2:Always ready for a deep dive, especially with some of the data cycles Edge has been putting out.
Speaker 1:Yeah, they've been looking at oil, natural gas and copper and some of their predictions. Well, let's just say they've got my attention.
Speaker 2:Oh yeah, I mean Cycles Edge. They've got that reputation, you know, for their data driven approach.
Speaker 1:Oh yeah, no gut feelings here. All about the numbers, the hard numbers. You know trends. And speaking of trends, let's start with oil. They're kind of calling a neutral stance right now, with prices kind of hanging between 67 and 70 bucks a barrel.
Speaker 2:Yeah, it's been pretty flat.
Speaker 1:But here's where it gets kind of interesting. They're talking about this thing called backwardation in oil futures. Have you ever heard of that?
Speaker 2:Of course, backwardation. It sounds a little complicated, but it's actually a pretty simple concept.
Speaker 1:Yeah.
Speaker 2:Imagine you're buying concert tickets.
Speaker 1:Okay.
Speaker 2:And the tickets for next week's show are more expensive than the tickets for the show next month.
Speaker 1:Okay.
Speaker 2:That's kind of like backwardation. Basically, the near-term oil contracts are priced higher than those further out, and right now the reading is 1.01.
Speaker 1:So what does that tell us? Is it time to like, bet against oil? You know, short it, hoping the price goes down.
Speaker 2:Well, not necessarily. See Cycle's Edge. They say we really need to see that backwardation number climb above 1.05.
Speaker 1:That's when the risk reward ratio starts looking really good for a short position. We're not quite there yet, so we just kind of wait and see. Exactly All right. But cycles edge also mentioned some geopolitical risks out there, particularly in the Middle East. You know that whole region can be a bit unpredictable.
Speaker 2:Oh for sure, Always something going on over there.
Speaker 1:Yeah, and all it takes is one little spark to set things off. What are they saying about that?
Speaker 2:Well, to keep tabs on that, they use this thing called the Geopolitical Risk Index or GPR.
Speaker 1:Oh, the GPR.
Speaker 2:Yeah, Think of it like a geopolitical earthquake sensor. Right it's measuring those tremors and right now it's actually pretty quiet, suggesting the market isn't overly worried At least not yet.
Speaker 1:So we should be watching that GPR. It's like if it starts jumping around, that could be a bad sign, huh.
Speaker 2:Oh yeah, a sudden jump in the GPR could be a sign of well, a potential market shock. But you got to remember oil's not like stocks. High volatility doesn't always mean prices are going to crash. Cycles Edge. They also keep a close eye on something called the oil VIX.
Speaker 1:The oil VIX. Ok, and what's that?
Speaker 2:It basically measures volatility expectations, just like the VIX does for the stock market.
Speaker 1:OK, I got you. So how does that oil VIX fit into their whole strategy?
Speaker 2:Well, if you see a spike in the oil VIX along with a sudden price drop, that could actually be a buy signal, a buying opportunity. Conversely, if the price shoots up and the VIX spikes too well, that might be a good time to sell. It's all about the context. Got to watch how price and volatility, how they kind of move together.
Speaker 1:So with oil it sounds like we play the waiting game. Keep an eye on that. Gpr, Watch that. Oil VIX Okay, but let's move on to natural gas. Now cycles edge. They've been pretty bullish on natural gas for a while now and they've been hitting those price targets pretty accurately oh yeah, they've been spot-on they called 3.05, they called 3.58 and boom, there it was. So what's their, uh, what's their secret?
Speaker 2:well, a big part of it is this interesting pattern they've been watching. They call it an inverse head and shoulders pattern forming on the charts. Are you familiar with that? I've heard of the head and shoulders, but yeah, so imagine a head and shoulders pattern, but flipped upside down. That's where the inverse comes in, and often this pattern signals a potential price reversal. And the neckline of this pattern? Well, it sits right around the 3.043 support level.
Speaker 1:So just to be clear if natural gas breaks through that 3.58 resistance level, what happens? Is it party time?
Speaker 2:Well, CyclesAge is seeing some serious potential gains there. Their target is 5.37.
Speaker 1:Whoa 5.37. That's a number I like, but seriously, how likely is that?
Speaker 2:Well, you know, nothing is certain in these markets, right, always got to consider the downside. If natural gas dips below that 3.043 support, especially below 2.95, well, that could signal further downward movement.
Speaker 1:So if things start heading south, where are those support levels?
Speaker 2:Well, their analysis shows 2.62 is the first level to watch, and if that breaks down, then the major support region between 2.13 and 2.24 comes into play.
Speaker 1:So natural gas is potentially a big winner, but it could also go the other way.
Speaker 2:Yeah, lots of potential, but also a little risky, Okay so oil is in wheat and sea mode.
Speaker 1:Natural gas is a potential roller coaster. What about copper? What's the story there?
Speaker 2:Well, copper is pretty interesting. Cycles Edge has been watching this rounding bottom pattern forming in the price, kind of centered around the 4.05 support level. And what's really encouraging is that the RSI, that's the relative strength index, it measures momentum, it's reset. And the MCD, which is another technical indicator that helps identify trends, well, it just flipped bullish. It's like they're both saying, hey, copper's looking good.
Speaker 1:So all signs point to copper prices climbing higher.
Speaker 2:That's what the chart suggests. Yeah, but there's a big hurdle at the 4.34 resistance level. If copper can break through that, then 4.70 comes into view.
Speaker 1:Okay, interesting. So we've got oil playing it cool, natural gas maybe ready for a big move and copper starting to heat up. It's like a commodities drama unfolding right before our eyes. But Cycle's Edge isn't done yet, are they? I mean, they're going to pull out some of their fancy analysis tools, right, oh, but Cycles Edge isn't done yet, are they?
Speaker 2:I mean, they're going to pull out some of their fancy analysis tools, right? Oh yeah, they're just getting started. They're going to factor in their proprietary cycle forecasts, seasonality data, all that good stuff. And they even hinted at looking at copper miners the CoPX ticker as another potential investment angle.
Speaker 1:Oh, that's interesting. Now that's something to think about. But before we go any further, I want to ask you, our listeners, a question. All right, fire away. If you had to pick just one commodity right now for your portfolio, which one would it be, and why? Think about the global economy, Think about supply and demand, those geopolitical risks we talked about even long-term trends in the energy sector. There's a lot to consider.
Speaker 2:Definitely a lot to chew on.
Speaker 1:All right, we'll be back after a quick break to hear what the expert thinks, and we'll also dig a little deeper into those cycle forecasts and seasonality data. So stay tuned.
Speaker 2:Welcome back everyone. All right, so before the break we were getting pretty deep into the weeds with oil, natural gas and copper.
Speaker 1:Yeah, some interesting stuff going on there.
Speaker 2:And you mentioned those cycle forecasts and seasonality data, that Cycles, age uses those sound kind of mysterious, almost like something out of a sci-fi movie.
Speaker 1:Right, it's like they've got some kind of secret code to unlock the future of the markets, but really it's not that complicated.
Speaker 2:OK.
Speaker 1:The ideas behind them are actually pretty straightforward. Think of cycle forecasts like studying the tides right. The tides the ocean has its rhythm high tides and low tides.
Speaker 2:Yeah.
Speaker 1:Well, commodities often go through these periods of highs and lows too, and they kind of repeat, you know, with some regularity Cycles Edge. They use these fancy math models to crunch the numbers, analyze historical data and pinpoint those cycles to get an idea of where prices might go next. So they're looking for those repeating patterns, the ebb and flow. Okay, that makes sense. But what about that seasonality data? Is that like how ice cream sales go up in the summer?
Speaker 2:You got, so you know natural gas demand. It tends to spike in the winter because everyone's using it for heating right.
Speaker 1:Yeah, makes sense.
Speaker 2:And that can push prices up. Or maybe copper demand surges in the spring and summer because of construction Right. So Cycles Edge, they take all this seasonality stuff into account as well.
Speaker 1:So are they stacking the deck in their favor?
Speaker 2:In a way, yeah, they're finding those sweet spots where all the stars align. They're finding those sweet spots where all the stars align, those moments when the technical patterns, the cyclical trends and the seasonal influences, they're all pointing in the same direction.
Speaker 1:Oh, I see. So it's like they're playing commodity detective.
Speaker 2:Exactly Piecing together all the clues.
Speaker 1:But even with all this analysis, I'm guessing there are still some surprises, right?
Speaker 2:Oh, absolutely.
Speaker 1:Yeah.
Speaker 2:I mean. No model can perfectly predict the future. The markets are always going to throw us curveballs.
Speaker 1:So it's about managing risk.
Speaker 2:Exactly. It's about using these forecasts as a roadmap, not like a guarantee.
Speaker 1:Right, OK, Makes sense. You know earlier you mentioned that Cycles Edge was looking at copper miners the copy X ticker as another potential investment. What's the connection there? Is it like buy one, get one free?
Speaker 2:Uh huh, Not quite, but it's a smart connection to make. See the stock prices of mining companies. They're often tied to the price of the commodity they produce. So if Cycles Edge is bullish on copper, they might also be bullish on copper mining companies.
Speaker 1:Oh, ok. So if the price of copper goes up, the mining companies could see their profits go up too, marc.
Speaker 2:Thiessen, exactly, it's like a leveraged play on the price of copper.
Speaker 1:Danielle Pletka oh, so more risk, but potentially a much bigger reward, marc Thiessen. Right, danielle Pletka Now, before the break, we asked our listeners which commodity they thought had the most potential in the coming months.
Speaker 2:Marc Thiessen yeah, that's the.
Speaker 1:It is, it is, but the global economy, it's like this giant, constantly shifting puzzle. There are so many things that can affect commodity prices, from supply chain problems to geopolitical events, to changes in consumer demand.
Speaker 2:It really is.
Speaker 1:It's enough to make your head spin. But, based on what we've learned today, are there any commodities that kind of stand out to you, that have a real chance to do well?
Speaker 2:Well, I think oil, natural gas and copper, they all have their strengths right and their weaknesses. Let's start with oil. We talked about those geopolitical risks in the Middle East. Those could definitely disrupt supply and send prices higher.
Speaker 1:Yeah.
Speaker 2:But we've also got this global push towards renewables right.
Speaker 1:Yeah, that's true.
Speaker 2:And that could really put a dent in oil demand over the long term. It's kind of like a tug of war.
Speaker 1:A real push and pull.
Speaker 2:Yeah, exactly Now. Natural gas. A lot of people see that as a bridge fuel in the transition to cleaner energy. It burns cleaner than coal or oil, so we might see demand keep growing in the short term and remember that inverse head and shoulders pattern we were talking about. Well, that suggests there's some serious upside potential there.
Speaker 1:Right, right. And what about copper? What's its story?
Speaker 2:Well, copper is essential for all those industries that are really booming right now, like electric vehicles, renewable energy infrastructure, all that stuff. So as the world electrifies and decarbonizes, demand for copper. It's expected to just explode. Wow, and remember that round and bottom formation we discussed and those bullish signals from the RSI and the MCD. Well, those point to a potential surge in prices.
Speaker 1:So it sounds like each commodity has its own unique story, its own potential for growth.
Speaker 2:That's right. It's like they're all competing in a commodities Olympics, but how do we know which one will win the gold?
Speaker 1:Right that.
Speaker 2:That's where the real work begins. You've got to weigh the risks and opportunities of each commodity and decide which one aligns with your investment outlook. And that's why analysts like Cycles Edge they're so valuable. They give you the data, they give you the analysis, they give you the insights you need to make smarter decisions.
Speaker 1:Yeah, I feel like I've learned so much today. It's like you've given me a secret decoder ring for the commodities market.
Speaker 2:Yeah, glad to hear it.
Speaker 1:But I'm sure there's still so much more to discover.
Speaker 2:Oh for sure, these markets, they're constantly evolving, always something new to learn. But before we let you go, we want to leave you with a final thought, something to really make you think about your own investment strategy.
Speaker 1:All right, hit us with it. So we've talked about oil, you know, trying to balance those geopolitical risks with the shift towards renewables. And then there's natural gas, maybe poised for a surge, and copper playing a critical role in well, in electrifying the world. But here's the thing.
Speaker 2:Here's the real challenge.
Speaker 1:Yeah, imagine you had to pick just one of these commodities to add to your portfolio right now. Which one would you choose, and why?
Speaker 2:Ooh, that's a tough one.
Speaker 1:I know right, but that's what makes it fun. It really forces you to think, to weigh the pros and cons.
Speaker 2:Yeah, trust your gut.
Speaker 1:It's like we've given you all the pieces of the puzzle.
Speaker 2:All the clues.
Speaker 1:And now it's up to you to put them together.
Speaker 2:And see the big picture.
Speaker 1:Exactly. And who knows, maybe this deep dive will spark some ideas you've never even thought about before.
Speaker 2:I hope so.
Speaker 1:All right. So there you have it. We've explored the oil market, the natural gas market and the copper market. We've looked at the trends, the risks, the opportunities.
Speaker 2:The potential.
Speaker 1:And we've challenged you to well to think about how all of this applies to your investment strategy.
Speaker 2:Absolutely, and if you want to go even deeper, I highly recommend checking out Cycles Edge's full analysis. Lots of great stuff there.
Speaker 1:Thanks for joining us on this journey into the world of commodities. Until next time, keep exploring, keep learning and keep asking those tough questions.
Speaker 2:And never stop diving deep.
Speaker 1:That's right.