USO/XLE Update

Yesterday USO looked like it was getting ahead of itself and setting up for at least a decent 1-2 day short trade to make a little extra cash. As of the last update, using the Trend Channel as a trigger for the short trade USO was a short at a break below either $38.80 which would represent a false breakout from an ascending triangle or $38.70 which was the Trend Channel long position stop and change of trend to down.

 Here's the Trend Channel and the break of both $38.80 and $38.70, I'm a huge fan of real time alerts which would have let you know USO was breaking those levels and allowed you to open a trade which I suggested using the leveraged crude short, SCO.

 Here's the false breakout yesterday from a bullish ascending triangle, trader would be buying on the pattern alone, much more on the breakout. The trigger for the USO short was a failure of this breakout at $38.80 which means we would be looking at a head fake move. The parabolic spike in the middle of the false breakout ALWAYS attracts my attention as they usually fail.

 Here's the 30 min Trend Channel which has held the swing trade moves both long and short in USO, an entry at $38.80 would mean that you would have a zero risk trade as the Trend Channel for a swing trade is now at $38.80 as the stop out level. If you caught this trade, email me and let me know.

 I also pointed out the sell signal on the hourly chart of my custom DeMark inspired indicator as well as an earlier buy signal.

 The main problem for USO came with the very bad looking 15 min 3C chart, here you can see accumulation at the lows, distribution at the highs, a cycle. These are generally pre-planned cycles as there is accumulation of shares to sell in to rising prices.

Confirmation came in the form of multiple timeframes in 3C aligning, like this 10 min chart

As well as the 5 min chart which really went downhill around the time of the false breakout's parabolic spike.

We'll take a look at Energy and ERY next. The market has lost downside momentum and has been under intraday accumulation so a bounce should develop soon, you may want to consider using that price strength to enter positions you have had your eye on.