This correlation is much more often a question of when than of if. We wrote about it a few weeks ago and it is starting to play out. But I’ll be honest, it is for a reason I may have overlooked. None the less, the impact is real and it is setting up an opportunity.

The connection we are talking about is between two oil ETFs one tied to US oil prices and the other to oil producers. The relationship between how their prices move has been reliable and we are seeing it play out again.

Plus our trade from late last week is getting juicier. Let’s take a look at both and a link that gets you early access to a great opportunity.

USO tracks US oil prices and OIH tracks producers. In the article a few weeks ago we noted that OIH will trail USO as producers often need to be able to adapt their business to realize the benefit of higher oil prices. Today OIH jumped but it wasn’t simply from producers finding efficiencies and ways to better leverage their existing infrastructure.

Another benefit from higher oil prices was that South Korea recognized the need to protect itself and it’s access to oil. It committed a massive investment in oil production that will safeguard its interests and hopefully pay off.

Just as it isn’t the if but the when, the why matters less than the consistency of this relationship. We will be watching OIH this week and looking for a solid option trade. The options for OIH are less liquid than USO so it requires a more careful selection.

Our Zoom calls from last week picked up some tail wind today and we will also be keeping an eye on them to see if this momentum keeps going.

Tomorrow at 1pm ET, Blane Markham is diving into an innovative way to use momentum signals that updates the antiquated methods to make them much more effective. You can check out an earlier preview here and also jump using this same link tomorrow to catch Blane live and answering questions.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily