As trading desks in New York and Europe open, they will face an interesting choice – head out early and avoid the traffic queued up for the long weekend or stay back and catch some action? Some markets in Asia (Singapore, Thailand) were closed for the day Friday; the US is closed on Monday, 31st May on account of Memorial Day. Personal income, spending and consumer sentiment data comes out late Friday afternoon and despite the inactivity and thin volumes in Asia, Oil traded at a high of US$ 75.45 to a barrel today before falling to 74.70 when Euro picked up and then weakened again during trading in Asia leading to the weakness in Oil.
Forecasts and predictions about the Hurricane season in the coastal, oil drilling regions of Atlantic and Gulf of Mexico is also picking up coverage steam on Google news and Oil related search queries. My guess for the day is that we will see whatever movement we need to see in the first half of the day, US Eastern time, followed by some late reaction when the consumer sentiment number comes out. But there aren’t any major surprises expected.
If you own the June 19th expiry options on USO or OIL, both would need to move by 2 – 4 dollars Tuesday next week for you to make up on Theta (the change in option price on account of chance in time). So if you are looking for a clean exit, take it at market open and get out and start again on Tuesday morning.