Don’t look now, but the sharp slide in crude prices may be leading the proverbial sheep to slaughter. Investors have piled into the market’s largest crude ETF over the last several months sending the number of shares outstanding to the highest level since 2009. We suspect many of these “investors” might be unaware that they’re currently staring down the most severe decoupling between second- and first- month contracts in four years.
"normal" knife catching BTFD'ers piled into USO for the bounce...
The last 2 times such an extreme contango occurred, USO volatility was gappy and extreme.
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Sell low, buy high anyone?