"Analysis by the The Australian shows moves in the five-month-old Dalian Commodities Exchange iron ore futures price have become highly correlated to the overnight moves in the spot price, which Platts puts out well after market using private information from hundreds of physical iron ore traders."
So where's the analysis? what was the hypothesis? where are the controls? It's just pseudoscience.
They could've just come to hotcopper and pinched my analysis I posted last year... "On a monthly average price basis, forward curve pricing correlated with spot pricing (R^2 = 0.97) and forward curve price changes correlated with changes in the spot prices (R^2 = 0.88)." But as I also pointed out the predictive power of futures/swaps deteriorates at a fast rate. I also pointed out the predictive power of futures/swaps are significantly worse than the "controls" (which was lacking in this "journo"-science - and every student knows that you can't intrpret results without a control!!!)
Anyway...
AGO Price at posting:
97.7¢ Sentiment: Buy Disclosure: Held
