Long term, oil’s still technically wrecked. The bottom is probably in, but when we see a big move like this… well, it feels like a short squeeze. It feels like there’s some size caught on the wrong side of the oil trade.
The rolling returns study is under the chart. You acn see once oil really broke down, the percentage ranges have really stretched out.
Over the past 15 days, USO is up about 16%. That’s not the highest of the squeezes, but it’s pretty close.
The Oct 12 Puts are a good buy here as long as you SCALE IN. Don’t make this an all or nothing trade… as oil squeezes higher then get into those puts and work your basis down.