Public trading strategy
Peace deal progress and tankers moving again — oil prices look ready to fall
Thesis
The threat of an oil crisis has kept energy prices inflated, but the market is now rapidly pricing in a peace deal. With tankers successfully moving through the Strait of Hormuz again, the extreme supply squeeze is evaporating. Energy stocks and oil funds are likely to drop as oil prices come back down to earth, creating an opportunity to bet against them.
Strategy approach
Build a mean-reversion short strategy for crude oil using USO on the 4-hour (H4) timeframe. Entry: Short when the price breaks below the lower Bollinger Band (20, 2) and RSI(14) drops below 40. Exit: Cover at the 20-day simple moving average, or use a 2% hard stop loss.