Asymmetric upside in crude oil despite volatility
The guest argued that the long-term risk-reward asymmetry for crude oil remains heavily skewed to the upside despite short-term bearish seasonality.
The argument
While the host noted that seasonality remains bearish until February and could see another $10 to $15 of downside, the guest argued that the upside is more compelling and that short-term downside risks can be hedged out.
The thesis, stress-tested
✓ What validates it
- ✓Crude oil prices break above the 50-day moving average and the $62 level
- ✓A short squeeze pushes crude oil prices into the high $60s
▸ Risks discussed
- ▸Bearish seasonality persists until February
- ▸Technical breakdown of key support levels could trigger short-term liquidity washouts
Hear it yourself
"Seasonality stays bearish until February or so. I wouldn't be surprised if there's another $10 or $15 even of downside from here in crude oil prices before the next really big move happens to the upside."
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