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Oil, Only in an Uptrend

Commodities

Hold USO on every day after it closed ABOVE its 10-month (about 210-trading-day) moving average, and hold cash (0% return) on every day after it closed below. Benchmark is buying and holding USO.

$10,000 became
$7,081
beat S&P · $5,245
$10k became
$7,081
CAGR
-2.3%
Max drawdown
-65.8%
vs S&P 500
+35%

See this in the terminal — live earnings bands, fair value and rates.

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Read the story

Trend-following crude dodged the worst of a fund built to bleed. That is the whole story.

The rule. Hold USO on every day after it closed ABOVE its 10-month (about 210-trading-day) moving average, and hold cash (0% return) on every day after it closed below. Benchmark is buying and holding USO.

What actually happened.

  • $10,000 became $7,081. The same $10,000 in Buy and hold oil (USO) became $5,245. This strategy beat the benchmark by $1,837.
  • Compounded at -2.3% a year vs -4.2% for the benchmark.
  • Best year: 2026 (+80%). Worst year: 2016 (-23%). This is not a smooth ride.

The catch. At its worst, this strategy fell -66% from a prior peak — shallower than the benchmark's -95%. Would you have held through that? Most people don't. That's the whole game.

The takeaway. It worked here — but "it worked in the past" is the most expensive sentence in investing. The edge is real only if it survives costs, taxes, and the drawdown above. Show your work, then decide.

Drawdown from prior peak

Calendar-year returns

Line 11121314151617181920212223242526
Oil above its 10-month average (USO/cash) -6% -7% -18% -7% 0% -23% -2% +12% -23% -8% +60% +2% -9% -15% -22% +80%
Buy and hold oil (USO) +13% -12% +6% -42% -46% +7% +2% -20% +33% -68% +65% +29% -5% +13% -8% +104%

Cash earns 0% while the rule is out of the market; a real T-bill sleeve would add to this line, especially in high-rate years. How we test

Rebalance: daily check against the 10-month (210-day) average, cash below · Window: 2011-09-02 → 2026-09-02 · Last run Sep 2, 2026 · JSON