Lme Warehouse Drawdown Momentum
In plain terms
When physical buyers drain LME copper/aluminum/nickel warehouses faster than usual, miner stocks (FCX, AA, VALE) rally for the next 1-4 weeks.
How it works
Drawdowns in visible LME warehouse stock lead front-month metal price by 1-4 weeks (physical buyers bidding for delivery against the marginal inventory). Upstream base-metal miners track the front-month with ~1.2 beta and re-rate as stocks fall.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Lme warehouse stocks
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- 300-800 bps over 10-20d
- Tested over
- T+1 to T+20d
Pindyck's structural model implies ~3-8% returns over 10-20d for the upstream miner basket on a > +1σ stock-drawdown event.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
When crude oil or natural gas front-month prices have dropped more than 5% over the past six months, short the matching oil/gas producer stocks for 30 to 90 days. This is an internal price-trend heuristic, not the cited academic basis strategy (which our single-contract data cannot compute).
Copper outpacing steel = capex cycle accelerating → long industrials.
EIA crude-storage surprise (vs consensus) → 1-5d energy move.
Explore Lme Warehouse Drawdown Momentum on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.