It is tough to trade today and keep a safe distance from politics. If you even graze the subject as you try to navigate trades and markets, the immediate flashpoint can scar you for life. That said, I am going to jump in. Well… kinda.

In watching the conflict progress, it has been hard to deny that $100 per barrel for oil is a hard line for the current administration. In their defense, it is a big psychological line that impacts the perception of the economy and, as a result, potential voting decisions. It could be a stretch to say that the momentum to that key price point is what ended multiple days of strikes, but it is not completely implausible.

So, if this theory is remotely valid, how do we trade it? Let’s look at USO and see if there is an opportunity.

Friday offered a drop off a consecutive 5 day aggressive bull run. If we look at buying a July 31 140 put as a short term trade, it is currently at about 7.50. This gives us a little room to for a flat or slightly up day but puts us in a good position if the pause on attacks continues and creates optimism for some resolution to the conflict. This is definitely a trade in the higher risk, higher reward category so if you consider it be sure to adjust your position accordingly and don’t take it if you can’t handle a potential loss.

This is going out on a limb but there is some logic to the madness. Let’s see how it plays out.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily