CMC Forecast + Trading Strategies


Bullish Case: Strong fiscal report and undervalued 60C calls create bullish sentiment, supported by AI forecast.


Bearish Case: Declining steel prices, high P/B ratio, and insider sales suggest potential overvaluation and price drop.


Potential Outcomes: 45% chance for moderate gain with favorable fiscal results, 35% chance of decline from bearish forecasts, 20% chance of minimal movement.


Trading Oracle: Trade a bullish long volatility strategy with debit spreads. Buy $57.5 calls, sell $60 calls expiring in ~154 days. High implied volatility edge, positive reward:risk, 30% annual return historically.


July 20, 2024


Commercial Metals Forecast

CMC      Commercial Metals











Correlated Assets

Assets that tend to move strongly with CMC



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.62)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.22)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.27)



Uncorrelated Assets

Assets with little price relationship to CMC



LI Forecast + Options Trading Strategies   LI  Li Auto (-0.22)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.27)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.62)



Anticorrelated Assets

Assets that tend to move strongly against CMC



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.62)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.22)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.27)





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