What I Told Cycle 9 Alert Subscribers about Gas Prices

While drivers everywhere are cursing at the gas pumps, energy traders are celebrating. Well, those on the long side of the trade, that is.

There’s a strong seasonal pattern in gasoline futures.

And there’s a lot of money to be made if you know what you’re doing. So much, that a $75 tank of gas is chump change compared to your trading profits.

The bottom line: you have to be long gas at the start of every new year.

The seasonal pattern is strong, with RBOB gasoline futures typically rising between January and May. It happened last year. It happened in 2010. It happened in 2009…

So far, this year has been no different.

One contract of RBOB gasoline futures traded for $2.7646 on January 2, 2013. This contract recently peaked at $3.1691 for a gain of 15% in less than two months.

And those are unleveraged returns. Futures traders use leverage, so gains are amplified. You’d have made $16,989 buying just one contract of RBOB on January 2. It would have cost you just $5,500 in margin to make this trade, giving you a return of 208%.

Here’s the chart I’m looking at:

See larger image

But if you’re not a futures trader… don’t worry. I’ve identified other ways to play these commodity trends.

In fact, I shared a very specific recommendation with my Cycle 9 Alert early-bird subscribers at the end of January… one taking advantage of this strong January through May seasonal bias of increasing gas prices.

We’re still in the position, so I can’t give away the details just yet. But I’ll be sure to let you know how it went once we close the trade out. I expect we’ll be out by late March or early April.

And by that time you’ll have the chance to join Cycle 9 Alert too… so you can get in on our new winning plays. After months of rigorous research and testing, I’m very happy to report we’re ironing out the final, final details of our offering to all Survive & Prosper readers.

I can’t give away the launch date yet or the exciting deal we’re planning to offer you (although I can say it’ll be a no-brainer)… but stay tuned for more info shortly!

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Our new infographic, How Will Trump Restore the Dream of the Golden Years?, dives deep into U.S. retirement figures, to analyze a scary trend in the U.S. and gain perspective on the future of the retirement landscape.

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Categories: Markets

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.