๐๐๐The most mind blowing trade this week was the violent whiplash in the global energy markets. This was when geopolitical headlines completely overpowered the largest emergency oil release in human history.
The TACO Whiplash & The USD 117 Peak
Early in the week, Brent Crude skyrocketed to USD 117 per barrel following Iranian strikes on regional refineries.
Then the markets staged a huge 24 hour reversal after Trump's vague hints of a "peace treaty" surfaced, causing oil to plummet back below USD 90.
By Thursday, the optimism evaporated as 2 oil tankers were attacked and Oman evacuated its major export terminal. Brent surged 9.2% back above USD 100, proving that the War Premium isn't going away quietly.
In a desperate bid to stabilise oil prices, the IEA agreed to release an unprecedented 400 million barrels from strategic reserves. It is the largest in history.
Yet the market effectively ignored it. Oil prices continued to climb because 400 Million Barrels of oil can only cover a few days of global demand.
There is a way to trade this volatile oil market:
Trade USO $United States Oil Fund LP(USO)$
The play: Use USO for intraday or short term swing trades to capitalise on breaking news like Oman Port hits or Iran war updates.
However caution is advised as technical signals show that USO is currently overbought with an RSI that recently flashed above 90.
Some analysts recommend buying pullbacks toward the USD 104.53 support level with a long term breakout target near USD 127.
While USO is currently benefiting from Backwardation where near term oil is more expensive than future oil, the most dangerous time to hold is when the market flips back to Contango.
Concluding Thoughts
So Yes! USO is definitely the trade that blew my mind this week. Trading USO is like riding a roller coaster without any seatbelts. What a thrilling end to this week.
@Daily_Discussion @TigerStars @Tiger_comments @TigerClub @CaptainTiger
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- elena Mei Yingยท03-13 21:43trueeeLikeReport