Oil crashes as Middle East peace deal floods the market — buy the dip on major o
Thesis
The peace deal and Iraq's announcement to boost output to over 3 million barrels a day is scaring investors into selling oil, pushing prices to unsustainable lows. While the headlines sound dramatic, oil prices tend to snap back violently once the initial panic selling exhausts itself. The last time we saw a similar supply-shock headline cycle, prices found a bottom within days and rallied sharply. Look to buy beaten-down oil producers or oil ETFs while they are on sale.
Strategy approach
Build a mean-reversion strategy that enters long on CL futures (or USO) on the H4 timeframe when price is more than 2 standard deviations below the 20-period simple moving average (Bollinger Band touch) and RSI(14) < 35. Exit when price crosses back above the 20-period SMA. Use a 2% stop loss based on entry price.