Short USOIL Trade Opened on the 19th of Jan, 2020
Updated
This is a short USOIL trade which I opened on the 19th of Jan, 2020 at 59.424. I then, subsequently, opened another short position on the 23rd of Jan at 55.136.
I feel that USOIL will drop to approximately 50.000; where I hope to close the trade.
My rationale for this trade is that with the impending US Election, low oil or gas (as in gasoline) prices are a significant vote winner for the Republicans and every effort will be made to keep oil prices low during the summer of 2020. Low oil, however, has a detrimental affect on US Shale Companies.
There is a correlation between falling USOIL prices and falling JNK prices; as well as XLE or the US Energy Sector, (which is a major component of the SPX).
Low XLE values will tend to hold the SPX back. (These are all potential trades off the back of low USOIL, and can be used as indications of which way oil is heading).
Also the trendline indicates a drop from the previous two peaks (which I have marked), and using that logic, I expect USOIL to drop to about 50.000 and hold steady there.
I feel that USOIL will drop to approximately 50.000; where I hope to close the trade.
My rationale for this trade is that with the impending US Election, low oil or gas (as in gasoline) prices are a significant vote winner for the Republicans and every effort will be made to keep oil prices low during the summer of 2020. Low oil, however, has a detrimental affect on US Shale Companies.
There is a correlation between falling USOIL prices and falling JNK prices; as well as XLE or the US Energy Sector, (which is a major component of the SPX).
Low XLE values will tend to hold the SPX back. (These are all potential trades off the back of low USOIL, and can be used as indications of which way oil is heading).
Also the trendline indicates a drop from the previous two peaks (which I have marked), and using that logic, I expect USOIL to drop to about 50.000 and hold steady there.
Note
closed both shorts at 52.714 on the 27th of jan 2020 at 5.42pm london timemade 9.132$ on the trade
prnt.sc/qtmg73
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