I am Stephen Davis, senior market strategist with Walsh Trading in Chicago, Illinois USA.

Crude oil and the product markets -- heating oil, diesel, and gasoline – rallied this week following two significant news events. According to a White House fact sheet released on Monday, the EU will purchase $750 billion in U.S. energy and make new investments of $600 billion in the United States, all by 2028. 

The second event to hit the news comes as President Trump shortened the timeline from 50 days to less than two weeks for Russia to end the war with Ukraine, prompting concerns that potential sanctions could hit supply. Such sanctions could include Russia's oil customers slapped with secondary tariffs of 100% or more.

Below is a daily chart of September WTI (West Texas Intermediate) crude oil. This shows three days of higher highs and higher lows. Often, markets go in days of three and it's going to take a lot of buying to maintain the rally, in my opinion. 

One trade strategy is to sell September crude oil at 69 even or better. It's trading at 69.27 at the time of this writing. Use a $1 buy stop. So if you buy at 69.27, put your stop at 70.27, good until cancelled. For a profit objective, buy it back at 67.00. Risking one to make two is good trade ratio, in my opinion.

One trade strategy is to sell September crude oil at 69 even or better. It's trading at 69.27 at the time of this writing. Use a $1 buy stop. So if you buy at 69.27, put your stop at 70.27, good until cancelled. For a profit objective, buy it back at 67.00. Risking one to make two is good trade ratio, in my opinion.

An options trade strategy is to sell September crude oil at 71 call at 144 ($1440). These options expire on August 15. Friday is August 1 so if and when crude oil sells off, time decay is going to work in your favor, leaving the ball in your court. If crude oil gets above 71 or 72, this strategy is not working.

Call me anytime at 312-878-2391 if you have questions or want to discuss strategies.

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Stephen Davis
Senior Market Strategist 
Walsh Trading

Direct 312 878-2391 
Toll Free 800 556 9411
sdavis@walshtrading.com  
www.walshtrading.com

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