Unstoppable oil - range break out
Oil is extending the break out move, trading at levels where we haven't seen black gold close at since forever.
Our take on oil from earlier this week was basically;
"We are seeing the similar range set up across assets. With cross asset vols all having crashed lately, the general view, playing a possible break out via options can be applied to oil as well. Trading ranges is often frustrating, but when vols are relatively low, it costs little to hedge/speculate about a possible break out."
Note as oil extends the move higher, oil vol, OVX index, prints new recent lows.
The question when it comes to oil is whether or not large specs will be "forced" to chase this move?
So far they have been extremely unimpressed...
Our take on oil from earlier this week was basically;
"We are seeing the similar range set up across assets. With cross asset vols all having crashed lately, the general view, playing a possible break out via options can be applied to oil as well. Trading ranges is often frustrating, but when vols are relatively low, it costs little to hedge/speculate about a possible break out."
Note as oil extends the move higher, oil vol, OVX index, prints new recent lows.
The question when it comes to oil is whether or not large specs will be "forced" to chase this move?
So far they have been extremely unimpressed...