What Signycle Tracks and Why
Signycle tracks 18 commodity and macro signals that together form a picture of where we are in the global commodity cycle. The signals were selected based on three criteria: they must be publicly available (not behind paywalls or proprietary databases), they must have a documented historical relationship with cyclical stock performance, and they must be updated frequently enough to be actionable — at least weekly, most daily.
The 18 signals cover five categories: energy (Brent, WTI, LNG, Brent-WTI spread), metals (LME copper, LME aluminium, iron ore, gold), shipping (VLCC rates, BDI, SCFI), agriculture and materials (salmon, urea, steel), and macro (EUR 10Y yields, PMI, NATO defence spending, rig utilisation, flying hours, lithium).
Data Sources
| Signal | Primary source | Frequency |
|---|---|---|
| Brent crude | ICE Futures Europe (front month) | Daily |
| WTI crude | CME NYMEX (front month) | Daily |
| LME Copper | London Metal Exchange (3-month) | Daily |
| LME Aluminium | London Metal Exchange (3-month) | Daily |
| Gold | LBMA spot price | Daily |
| Iron ore | Platts 62% Fe CFR China | Daily |
| VLCC rates | Baltic Exchange TD3C (Ras Tanura–Chiba) | Daily |
| Baltic Dry Index | Baltic Exchange composite | Daily |
| SCFI | Shanghai Shipping Exchange | Weekly (Friday) |
| LNG rates | Baltic Exchange BLNG1 (174k cbm spot) | Daily |
| Salmon price | Fish Pool / Nasdaq Salmon Index (Oslo) | Weekly |
| Urea | Argus / CRU Middle East FOB benchmark | Weekly |
| Steel (HRC) | Platts China HRC export | Weekly |
| EUR 10Y yield | German Bund (ECB data) | Daily |
| Global PMI | S&P Global / JPMorgan composite | Monthly |
| Rig utilisation | Baker Hughes international rig count | Weekly |
| Flying hours | ICAO / OAG global air traffic index | Monthly |
| Defence spending | NATO annual report (% GDP) | Annual |
How Buy and Sell Zones Are Defined
Each signal has three zones: buy, neutral and sell. The thresholds are set using a combination of historical cost-of-production analysis, percentile analysis of the past 20+ years of data, and documented relationships between signal levels and subsequent 12-month stock returns.
For commodity prices (Brent, copper, LME aluminium, iron ore): the buy zone is set at or below the long-run marginal cost of production for the highest-cost producer that the market needs to balance supply and demand. At this level, the industry is in distress and supply curtailments are creating the conditions for the next recovery. The sell zone is set at the level where new supply investment is widely incentivised — typically 150-200% of the long-run marginal cost.
For shipping rates (VLCC, BDI, LNG): the buy zone is set at approximately the daily operating cost plus minimal capital recovery — the level at which operators are barely breaking even and fleet growth stops. The sell zone is set at 3-5x operating cost, the level at which new vessel orders become highly profitable and the orderbook begins growing faster than demand.
For macro signals (PMI, EUR 10Y, rig utilisation): the zones are set based on documented threshold effects — PMI below 48 has historically been associated with commodity demand weakness in 80%+ of observed periods since 2000. EUR 10Y below 1.5% has historically been associated with strong bank NIM expansion. These are empirical thresholds, not theoretical constructs.
The Cycle Score
The Signycle cycle score (0-100) aggregates the 18 signals into a single number representing where we are in the commodity cycle. Each signal is scored from 0 (deep buy zone) to 100 (deep sell zone) based on its position relative to its historical range and zone thresholds. The 18 scores are then weighted and averaged, with energy signals carrying slightly higher weight (30%) given their broader economic impact, followed by metals (25%), shipping (20%), agriculture/materials (15%) and macro (10%).
A score of 0-30 represents a buy zone — most signals are in or near buy territory. 30-60 is neutral — mixed signals, no strong directional call. 60-80 is late expansion — most signals are elevated, begin reducing highest-leverage exposure. 80-100 is a sell zone — nearly all signals are at or above sell thresholds, systematic reduction of cyclical exposure recommended.
Limitations and Disclaimer
The Signycle framework is an analytical tool, not an investment advisory service. Several important limitations apply:
Signal thresholds are historical, not predictive. The buy and sell zones are based on what has worked historically across multiple cycles. Future cycles may have different dynamics — new energy sources, different Chinese demand patterns, structural supply changes — that alter the relevance of historical thresholds.
Geopolitical events can override cycle signals. The 2026 Hormuz crisis is a clear example: VLCC rates at $495,000/day are not a "normal" sell zone — they are a crisis-driven anomaly. The framework is designed for structural cycle positioning, not for navigating acute geopolitical shocks.
Individual stock analysis is required. The signals tell you about the commodity environment — not about individual company balance sheets, management quality or operational execution. A company can be in the right cycle position and still underperform because of company-specific problems.
All content on Signycle is for informational and educational purposes only. Nothing on this site constitutes financial advice, investment advice or a recommendation to buy or sell any security. See the full disclaimer for details.