USO/Silver

From yesterday's post about buying near the lows of the trading range in both...

 The point of these trade ideas has more to do with risk:reward then anything else. If you are using risk management like I hope you are, being wrong here on either one of these trades is a fairly low risk proposition. We get paid to take risks, although there's a difference between gambling and having an edge. The biggest edge individual investors have is time and patience. So SLV and other silver ETFs gave us a pretty decent shot at a low risk entry today.

 I wish the shorter term charts looked better, they don't look horrible, but this 60 min chart looks the best and it shows 3 positive divergences all at the lows of the range. That's the edge right now in the silver trades.

 USO gave us an opportunity as well, but also ran the stops, something you should be used to seeing by now.

 The old school day traders had a rule, in the first hour or so of trading, watch for a range to set up. Early this morning the lower range was established as volume shot up in USO at the first white arrow. The idea was which ever way the market  broke, above or below the range, is the direction it would take the rest of the day and eventually close at. So you can see where volume shot up again when the lower range was taken out. Then that old school idea failed and USO moved back into the range. This is Wall Street playing the TA game and as I often mention, TA traders not adapting to Wall Street's understanding of how predictable retail traders are.

Here's the 60 min chart in USO, it looks almost identical to silver.