USO Update...

Yesterday in this post I showed you two USO charts that were falling apart pretty quickly, a 10 min and 15 min.

So far today USO is down around 1% and near the a.m. lows and has also helped to drag XLE (Energy) down over 1.3%. Here are the updated charts....

 This was the first hint something was wrong in USO yesterday (10 min chart-leading negative divergence that was spilling over into the 15 min timeframe). It's too early today to expect much from this timeframe.

 The 5 min hart shows a minor cycle of accumulation (white), distribution (red) and some downside confirmation (green), the downside confirmation is a little higher then it should be for true confirmation, it may be that the 5 min chart has not had enough time yet to confirm or there may be an intraday bounce setting up near the a.m. lows

 The hourly chart is the one that seems to suggest the bigger trend is in trouble and given what we have learned about hyper-inflaton in Iran, a real conflict may take back seat to an internal Iranian conflict/ regime change if we have somehow managed to infect Iran with hyper-inflation.

 When we zoom out and look at the full scale of the hourly chart which is the most important intraday timeframe, you can see there appear to be real problems with USO as the rough confirmation of the past is replaced by a leading negative divergence of some size.

 XLE also warned yesterday on the 10-min timeframe and yesterday you know I thought something was fishy. Commodities were one of yesterday's biggest movers on what was attributed to a risk on mood because of Alcoa's earnings guidance in which their forecast for aluminum demand was 7% rather then 6.5%. I find this reasoning to be deeply flawed especially as Alcoa (presumably the company that would benefit most from the forecast) closed the day at a meager .11% gain.

 XLE 5 min (zoomed) suggests that bounce intraday that I mentioned above re: USO.

 XLE 5 min (zoomed out) shows the trend on this chart to be quite negative.

 Here's the 15 min XLE chart with accumulation in white/ distribution in red, currently there's a distribution cycle on par with the last that took XLE lower.

The daily chart which cuts out the noise appears to be very negative and it seems as if there was a major shift in the sentiment toward energy. I would consider this to represent the Primary trend, although intermediate and short term counter trend cycles will still be in effect. Usually as the Primary trend reveals itself clearly in price, these counter-trend rallies can be quite sharp, that is why they are there, to look like a real reversal and draw more suckers back in to feed the primary downtrend.