Iran peace deal looming — oil prices are sliding, bet on further drops
Thesis
War in the Middle East has been keeping oil prices inflated because of the threat to global supply, but a sudden peace deal would remove that threat entirely. The market is already reacting to the news by pushing prices down, and investors will likely keep selling as the actual signing of the agreement gets closer. This rush to sell ahead of the final deal creates a powerful downward momentum that traders can follow. Essentially, the 'war premium' built into the cost of oil is rapidly evaporating.
Strategy approach
Build a short-term short strategy on crude oil futures (CL=F) or the United States Oil Fund (USO). On a 1-hour timeframe, enter a short position if the price breaks below the previous day's low and the 20-period moving average. Target a 4% to 5% profit drop from the breakdown point, and place a strict stop-loss 2% above the breakdown candle's high to protect against a sudden deal collapse.