Trade Signal on USO

At the beginning of 2012 I started tracking trade signals generated by MarketClub on four ETFs - SPDR S&P 500 (SPY), SPDR Gold (GLD), CurrencyShares Euro Trust (FXE), and United States Oil Fund (USO).  MarketClub is a sponsor of Scott's Investments, but these trades/tests are conducted in near real-time (I typically don't have time during the day to publish the trades, so I post them in the evening).  My objective is to track and test, out-of-sample, the effectiveness of their trade signals.

MarketClub‘s trade triangle system gave two buy signals last week and the long position on USO was closed today at a loss of -8.06%, by far the worst trade to date.  Their signals are a trend following system, and appear to perform best in catching the bulk of long-term trends so they are susceptible to whipsaws. For background on the portfolio please see my initial article on the portfolio here.

This portfolio should be looked at more as a collection of trades, rather than a comprehensive portfolio. The positions can remain on a cash signal for weeks or months (both FXE and GLD have failed to give a buy signal in 2012), so rather than simply hold cash a real-world investor may allocate funds to other non-cash investments.

To track the historical performance and current trade performance click on the “Marketclub ETF Portfolio” on the right hand side of Scott's Investments.