Price Forecast:

Bullish Case: Strong bullish momentum could emerge as the market anticipates higher oil demand due to global recovery efforts, driving USO towards previous resistance levels around $80. Low implied volatilities also support potential price gains.

Bearish Case: A bearish scenario might unfold if geopolitical tensions escalate, hindering oil demand. This could push USO lower, especially with the current market exhibiting low volatility and choppy price actions, signaling caution.

Potential Outcomes:

• 30% chance of minor upward movement due to seasonal demand.
• 50% chance of sideways price action as volatility remains low.
• 20% chance of a downward shift if geopolitical tensions escalate further.

Trading Oracle: Given the current flat implied volatility, a bullish debit spread strategy seems optimal: buy the $75 call and sell the $77 call, expiring in 10 days. This exploits potential upward price movements while maintaining a risk-reward balance.

December 15, 2024