May 27, 2008
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Our Performance vs. the Market |
|
|
IR* |
DIA* |
SPY* |
QQQQ* |
|
3 Months |
5.90% |
5.50% |
4.90% |
11.50% |
|
6 Months |
16.70% |
-3.70% |
-6.00% |
-10.00% |
|
1 Year |
42.10% |
-2.26% |
-6.60% |
4.29% |
|
3 Year |
22.00% |
8.40% |
10.20% |
12.38% |
|
5 year |
21.50% |
10.30% |
10.28% |
14.40% |
|
Inception |
25.00% |
1.66% |
-0.40% |
-5.70% |
|
*IR = Our Investment Rate Model used
for market Timing. Dividends are
not included in these returns.
Inception was 1.3.00. Returns as of
5.5.08. 3,5, and inception data are
annualized. |
|
Click here to Review Our Returns |
Oil has reached lofty
levels in recent past and most recognize
that the reason is speculation. When
snowballs begin to roll, they tend to get very
big, very fast.
Bubbles have occurred many times
in recent past, and most of us have witnessed the trends
first hand. The Oil Bubble, however, has occurred
and may correct much faster than the other bubbles we
have witnessed.
Oil has moved up more than 30% in
the past few months, much more aggressively than the
Market related Bubbles we have seen. The old
adage: what goes up must come down has proven to be
correct in every other bubble that we have seen; the Oil
Bubble is not likely to break that trend.
The correction in Oil could
strike more swiftly than anyone is expecting.
From our strategic analysis the
fair price of USO (United States Oil) at this time is
approximately $71.54. From current levels a 30
point pullback is reasonable, and could happen in a
violent retracement spanning just a few days. We
have illustrated timing models to our clients s that
they have the short signals, and reversal triggers in
hand.
In addition, OIH (Oil Service
Holders Trust) has recently tested longer term
resistance according to the strategic analysis we have
provided to our clients. USO and OIH are not
directly related, but there are coordinative underlying
trends between them and a review of both is prudent.
Recent trends have showed that the
Market and Oil prices have been inversely related;
review the chart below for details. The recent
spike in Oil prices, we all know, has hit the Market
violently and caused underlying concern for holders of
DIA (Diamonds Trust) and SPY (S&P Depository Receipts).
Rightfully so, higher Oil Prices
affect all of us, and at current levels the price of Oil
could hurt the economy and cause a Greater Recession.
However, our analysis suggests that a correction in Oil
Prices is imminent, and that's god for the Market.
Soon, an excellent short
opportunity will present itself in USO, and an excellent
buying opportunity will present itself in DIA.
This is not a hedge!
For Timing Models please review
our client based analysis by reviewing the reports we
have offered for USO and OIH and our Strategic Market
Analysis
For details sign up for a free trial.
Good Trading
Stock Traders Daily
http://www.stocktradersdaily.com
1.866.213.2067
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