Trust The Charts

You’ve heard of Harold and the Purple Crayon (It’s a popular children’s book). Well we bring you Macke and the Purple Marker.

Our story is for adults but as the author himself will tell you, the theme is insanely simple. "It's impossible for anyone, including me to be smarter than the market in terms of knowing the supply and demand story of commodities,” Macke says.

But you can’t beat a purple crayon or marker! (Other colors also work well!) Learn how to spot trends and trust what charts tell you.

“Take a straight edge and connect the low-points of anything commodities.” In this example Macke looks at the one year charts of United States Oil Fund, Potash and Arch Coal. “

The low-points are your trend line. Buy when the stock closes near the trendline. Sell if it closes convincingly below," he says.

What’s the moral of this story? Obey the crayon. It gives you an entry point and an exit strategy.

For more of Macke’s analysis including the trend lines he drew on these charts please watch the video.

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