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October 23, 2012

Current Call Failed: Sold Crude Oil

The call to buy oil on October 3 has failed, an ignominious start to the Current Call series. At the time of the call, oil was trading at $89.66. The low for that day, which was believed to be a daily cycle low and thereby became our stop point, was $88.03. The total loss on the trade is therefore roughly 1.9%. Despite the trade's failed status, an important benefit to cycles can be illustrated in the limited scale of the loss. By aiming to buy the tail end of declines, cycles also offer hard stops very close to entry points.

Interestingly, the drop below the October 3 low forces a potential change in the daily cycle interpretation. This change, detailed in tonight's Member Letter, involves two modifications to strategy. First, a new buy point may be very close due to the aforementioned shift in the cycle phasing. However, the second change dampens the bullishness of the intermediate outlook.

So, the Current Call record begins at 0-1 with a 1.9% loss.


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