US blocks Iranian oil while the dollar hits decade-highs — ride the double tailw
Thesis
The collapse of the US-Iran ceasefire and the US blockade of Iranian oil sales create a direct supply shock in the energy market. This is happening at the exact same time investors are crowding into the US dollar, expecting the Federal Reserve to keep policy tight because of rising inflation. A stronger dollar historically makes US-denominated commodities more attractive globally, and when you combine that with a real, physical restriction in oil supply, domestic energy producers stand to benefit from both higher oil prices and currency tailwinds.
Strategy approach
Build a rule-based strategy that enters long XLE and USO on D1 when WTI crude oil makes a 10-day high and the US Dollar Index (DXY) is above its 50-day moving average, with a 21-day max hold and a 6% trailing stop.