Okay, Don, let's see if you two agree and how you view the United States Oil Fund (USO) here. What are your expectations for this stock?
Well, first and foremost, I admire him. He takes the opposite stance. Remember something, KJ. I, as you know, am not wrong, I'm just often too early, aren't I? So, moving on to (USO).
As you know, I've been taking a broader look at oil lately, and one of the most notable things within the oil market is that it has begun to see some selling activity. I mean, this is just price performance, and this is what price usually does, right?
Some sales activities are taking place there. What really caught my attention in the oil market was the deviation in the options chain, or if you prefer, the absence of that deviation.
Now, for those who are not fluent in the jargon of "option experts," what I am specifically talking about with regard to divergence is that we are not currently pricing in what we call upside tail risk.
The market right now in oil seems to have almost no fear of a strong upward jump, which is something that, look, I could sit here and talk about the geopolitical risks that would be very obvious, you know, and are already obvious in the Middle East.
As for the elections, although the United States may not do anything between now and the elections, I think there are significant geopolitical risks; Because they in the Middle East realize that the United States is unlikely to take any action between now and the election date.
But putting all that aside, I don't see much upside bias in the oil market, and I really think trading here is very effectively priced in because of that, meaning traders aren't looking at oil and saying it might bounce strongly upwards. And I like this positioning.