Iron ore closed up by 0.2% to 218.37 on 23 January 2021 and +2.3% on a weekly basis. Iron ore momentum was last calculated at +100.0/100 indicating positive momentum. Iron ore trend is +100.0/100 indicating a positive trend. Iron ore momentum exhaustion is 2.45909 indicating Iron ore is oversold.Iron ore RSI is 87.298 .
Iron ore closed at 218.37 on 23 January 2021. Iron ore trend was last calculated at +100.0/100 (range: -100 to +100) indicating a positive trend based on MacroVar models. Iron ore momentum was last calculated at +100.0/100 (range: -100 to +100) indicating positive momentum. Iron ore momentum exhaustion is 2.45909 (normal range: -2.5 to +2.5, overbought values: greater than 2.5, oversold values: less than 2.5) indicating Iron ore is oversold and a possible reversal is imminent. Iron ore RSI was last calculated at 87.298. Iron ore moving averages were last recorded as follows: 1-month moving average: 150.583 in an uptrend , 1-quarter moving average: 131.396 in an uptrend and 1-year moving average: 107.484 in an uptrend. Iron ore annual return was last recorded at None%, daily return was last recorded at 0.2%, and weekly return was last recorded at 2.3%. Iron ore histrorical 20-day volatility was last recorded at 19.9433%, Iron ore alpha None, Iron ore beta None and Iron ore maximum drawdown was recorded at None%. MacroVar models monitor Iron ore statistics based on historical data since 1970.
Momentum trading is used to capture moves in shorter timeframes than trends. Momentum is the relative change occurring in markets. Relative change is different to a trend. A long-term trend can be up but the short-term momentum of a specific market can be 0. If a market moves down and then moves up and then moves back down the net relative change in price is 0. That means momentum is 0. A short-term positive momentum, with a long-term downtrend results in markets with no momentum.
MacroVar Iron ore momentum signal ranges from -100 to +100. The
Iron ore momentum signal is derived as the mean value from 4 calculations for the China Import Dry Bulk Freight Index CDFI. The timeframes monitored are the following: 1 Day (1 trading day), 1 Week (5 trading days), 1 Month (20 trading days), 3 Months (60 trading days)
For each timeframe, the following calculations are performed: 1. Iron ore return is calculated for the specific timeframe and 2. if the return calculated is higher than 0, signal value output is 1 else signal value is -1.
Iron ore BADI momentum signal is the aggregate of the the 4 values. A technical momentum rollover is identified when
Iron ore momentum signal moves from positive to negative value or vice-versa.
Iron ore Trend
Iron ore trend signal ranges from -100 to +100. Iron ore trend indicator is the mean value of the 8 calculations described below. The timeframes monitored are the following: 1-month (20 trading days), 3-months (60 trading days), 6-months (125 trading days), 1-year (250 trading days)
For each timeframe, the following calculations are performed: 1. Iron ore Closing price vs
Iron ore moving average (MA) calculation: If
Iron ore is greater than Iron ore MA value is +1, else -1, 2. Iron ore Moving average slope calculation: if current
Iron ore moving average is higher than the previous MA,
Iron ore upward slope +1, else -1
Iron ore trend model can be used as a trend strength indicator.
Iron ore trend strength values ranging between +75 and +100 or -75 and -100 show strong trend strength.
A technical trend rollover is identified when Iron ore trend strength indicator moves from positive to negative value or vice-versa.
The most important trend indicator
The Iron ore 52-week simple moving average and its slope are the most important indicators defining a market’s trend.
Iron ore is in an uptrend when Iron ore price is higher than the 52-week moving average and the
Iron ore 52-week moving average has an upward slope. If fundamentals of the market have not changed and the moving average slope is still in uptrend, a price drop signifies a market correction and not a change of trend. Traders should watch oscillators like the
Iron ore oscillator and Iron ore RSI to buy the dip and still follow the trend. The moving average slope turn signifies a change of trend.
Iron ore Oscillator
The Iron ore oscillator estimated by MacroVar is the z-score of the current
Iron ore price versus Iron ore 1-year simple moving average price. The formula for the
Iron ore oscillator is:
Iron ore oscillator = (Current Price – 250 trading days
Iron ore simple moving average price) / (250 days Iron ore price standard deviation)
Iron ore oversold conditions
Iron ore is oversold when it is subject to a persistent downward pressure due to extreme fund outflows. When the
Iron ore is oversold it is often due for a rebound. Values of the
Iron ore oscillator lower than -2.5 signify oversold conditions. It must be noted that the
Iron ore oscillator must be analyzed ibn conjunction with the rest of
Iron ore quantitative factors. Traders should pay less attention to overbought or oversold conditions during strong trends. They should pay close attention during counter trends and all combined with the
Iron ore RSI.
Iron ore overbought conditions
Iron ore is overbought when it is subject to a persistent upward pressure due to extreme fund inflows. When the
Iron ore is overbought it is often due for a correction. Values of the
Iron ore oscillator higher than +2.5 signify overbought conditions. It must be noted that the MacroVar oscillator must be compared to the rest of the
Iron ore quantitative factors. Traders should pay less attention to overbought or oversold conditions during strong trends. They should pay close attention during counter trends and all combined with the RSI.
Iron ore RSI Indicator
The RSI indicator measures the speed and change of price movements. The RSI indicator oscillates between 0 and 100. RSI is a useful indicator during normal trending market conditions when an asset price oscillates around its trend value. During big moves and strong trends however, like short squeezes or price spikes RSI and other oscillators don’t work.
During normal trend market conditions and when Iron ore is in a downtrend RSI values between 50-60 signify overbought conditions before the downtrend is ready to resume. During
Iron ore uptrend, RSI values of 40 to 50 signify oversold conditions before the uptrend is ready to resume. It is strongly not recommended to enter a position when the RSI is “overbought” and falling or vice versa.
Iron ore Returns
MacroVar calculates Iron ore returns for the following timeframes: Daily, Weekly, Monthly, Yearly. The formula for calculating returns is: