At the end of February, I told you about a little-known oil investment strategy that has an accuracy rate of 73%.
In 19 of the past 26 years, this strategy has given investors gains.
Now it's time to put this strategy into use. In case you missed it, here's the strategy in a nutshell.
It's a simple three-step process.
Buy oil in the third week of March
Sell half the position in the last week of April
Sell the rest during the last week in May
We're now in the third week of March, and here's your crude oil trade.
A bit of background for where we are now. Last Friday, we got some shaky economic news. The Consumer Price Index had its largest gain in 10 months on the back of higher energy prices. We also heard consumer confidence fell and industrial production stalled.
That means the Fed's rosy picture of recovery isn't all it's cracked up to be.
But this uncertainty is exactly why Ben Bernanke left the possibility of another round of debt buying on the table.
We could be seeing a weaker dollar, and that will keep commodity prices – like oil – high...
I've been playing crude oil in my service, Macro Trader, with the United States Oil ETF (USO:NYSE). Other than futures or options on futures, this ETF is the best way to track the price of oil. And look how it's performed over the past three years...
After the big fall in oil prices during the financial crisis, USO has regained a lot of ground. In late September 2011, USO slipped just below its trading range (marked in purple) and found strong support at $29.10.
This point has established the bottom of this three-year uptrend.
Judging by the previous arc, the road isn't going to be smooth as USO makes its way to the top of its trend, but there's a lot of momentum behind prices right now.
Over the next two and a half months, we'll see USO inch 10% higher from here.