I’ve noticed over the past few years that whenever a barrel of oil hits a new price threshold that the DrudgeReport will put out a big red banner or siren announcing it. And then something happens almost without fail in the following two weeks. The price drops.
After seeing this pattern play out over and over, I decided to make some money on it. The last three times I saw the oil headline on Drudge, I bought shares of DCR. DCR MACROSHARES OIL DOWN is an ETF that makes money as oil falls in price. I set a goal of 5-10% gains with a 2 week holding limit. As soon at it hits, I sell the shares.
Yesterday when Matt Drudge threw out the $100 oil siren, DCR traded at $9.65. Oil immediately fell in price and now DCR is trading at $10.45. That is a 7.7% return one trading day later. And I’m $500 closer to retirement. Rinse and repeat.
Like any pattern, it only works until it doesn’t. And as Barry Ritholtz taught us – Take Responsibility for your own Trades!
UPDATE: On Friday DCR went up another 6.41% during the trading day. And then went up another 3.42% in after hours trading. That is a smoking return for for 2.5 days. Thank you Matt Drudge!