Wall Street will want to keep Crude up as long as possible, otherwise it puts downward pressure on the Energy complex which is one of the 3 main pillars of the market (Energy, Financials and Technology). However, I like USO as a short candidate right here, here's why.
USO is hitting resistance and volume has been terrible on the bounce. I'm sure they'd like to run a head fake above resistance, but if the Euro keeps moving down, it will be hard to do that.
Here's today's divergence in USO and the Euro, you see how closely they are correlated, so I don't expect the gap to last long between the two.
USO 1 min this a.m. is going negative.
The 2 min as pointed out yesterday is already in a leading negative position.
As is the 5 min
And a severe leading negative on the 15 min is the decisive chart for me.
Long term the 60 min has been in a leading negative position and this is why I have kept my longer term shorts in crude open.
Here's the 15 min Trend Channel that I showed you yesterday that has held the entire bounce, note also that ADX is turning/turned down from above 40 signaling the end of the trend.
A close up of the Trend Channel shows that the Trend was broken yesterday as prices dipped below the highest level of the lower channel, which is a stop out on a long position.
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