I had posted a blog on Oil on 17th Jan naming it Double Edged Sword - that you may read following the link ...
I had assessed Oil using CUE Charts and mused that Oil may start to go up from there.
That blog was posted at a time when all market experts were calling for $20 a barrel for Oil. Which was about 10$ lower than prevailing price at that time.
As it happened, the experts calling for $20 Oil barrel proved to be wrong. And the blog musing proved to be correct. How was it possible? What can explain this?
Firstly, we must acknowledge that it was not a certainty. It was a probability at that time. That became more real as time passed.
To be transparent, I did not have benefit (or curse) of too much knowledge on how Oil was moving around the world in Russia or Middle East. Neither did I have inside information on Oil Inventory and what not. Neither could I claim to have a conversation or two with large Wall Street Oil wheeler dealers. I am not even from Wall Street. I have my root in Main Street all along.
Probably I was saved by NOT having link to the experts - who seem to know that Oil was destined to go to $20 a barrel.
What I did not have in terms of elite or not so elite linkage to Wall Street was probably more than compensated by my willingness to trust own eyes. Not my own bias. But what the CUE Charts were saying. And some background information cobbled together in my mind; however vaguely; from Metastock Xenith/EIKON.
And I was willing and able to post my view confidently as a rational Superior Profit Trader. How did Oil play out since 17th Jan 2016 - when the Double Edged Sword blog was posted?
As we may see from above CUE Backdrop Weekly chart, Oil made a pretty modest 60% run upward since the blog was posted. Several Superior Profit traders had traded Oil during this period - some using ETF (USO). Some using Mutual Funds (!). And some might have used Options or Futures.
The correct entry point would have been sometime in the week ending on 26th Feb - in the chart above this is the week when Oil broke above Memory Resistance. Just the week prior to that CUE had shown a Bullish Headwind. However, that week ended below Memory Resistance and with a Long Upper Tail. Not Bullish enough to try to catch the bottom of Oil. We would patiently wait. And enter Long next week.
Entering a Long position in Oil in that week of 26th Feb would result in a profit of 46% in 3 months by now. Which is about 138% profit on annualized basis. Without using leverage involved in Future or Options. Pretty good result following own CUE/EIKON analysis and ignoring the so called self proclaimed experts who said Oil was heading to $20 a barrel ... Trusting own eyes and doing homework sometimes has its benefits. Won't you say?
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