Timing Your Start

Here's today's effort at being Captain Obvious

Yep, I blew it there.

Update: Not so bad here. Not liking that volume explosion, however.

Blah.

Pattern Recognition

Humans brain are frequently overly aggressive when searching for patterns.

Is there a tradable pattern here? The long-term and recent average says yes; the 1998-2003 average says no.

Update: I took 2007 and 2008 out of the long-term average because prices were so much higher in nominal terms than any other year. This flatted the long-term line and shifted the peak into the fall. I also added the following graphs.

Looking at the average can be deceiving.

This graph shows that some of the price increase is due to weakening of the dollar. Note that WTI Spot is not the price paid in these foreign countries due to variations in grade, contracts, origin, etc.

Divergence

Some graphs of ETFs and related indexes.

TBT is supposed to perform 2x inverse of TLT (for which I have inverted the data). However, it clearly doesn't. Neither track the rate indexes well. (NB: The rate indexes may be inappropriate, but I used them because I don't know of a price index to use.)

USO is supposed to follow WTI spot (after expenses and fees). Again, there's a big gap. But despite a lot of griping about USO across the tubes, it is performing better than the other ETFs I examined.

A follow-on question would be how are similar MUFs performing in comparison.

Overly Full Disclosure: June 2009

I'm finally out of my TBT. I got in too early, and my record says that I'm probably out too early - though I missed the high last Thursday before it got hammered for reasons I have not yet discovered. But 10% was still good enough for me. A lot of people say this is not a good ETF to hold more than a few days or weeks. I get the jist of the argument but I haven't quite gotten my head entirely around the details. The decay is one of the reasons I got out, plus there seems to be a general reversal of sentiment taking place.

I took a small position on USO a few weeks ago and exited that on Friday. There is a lot of speculation about speculation and front-running and tankers and yellow shoots, so I don't think it can go much higher. I made about 5% in two weeks.

I also had an even smaller position on UNG that I exited today. I made about 5% in 5 weeks. UNG has a better chance of going higher than USO, but weather, supply, and the change in sentiment point the other way.

Of course, I could kick myself for what I missed back in late November. Stocks I had on my candidates list as of 11/16, such as JWN and M and BHP, are up over 150% since then since then. Even CAT and TM and INTC are up nicely. But I paid too much attention to the doomers, and thought things could get a lot worse. Instead, I should have looked at what my spreadsheet was telling me - buy, Buy, BUY! Oh, well.

Update: My trade accounted for 0.0000074% of today's NYSE volume. Spiffy.

Disclaimer: you're an idiot if you invest based on anything I say.