USO Event

Members who have been here for several months know that I've been bearish on USO and thus have kept the short position open in the Model Portfolio, despite the recent bounce.

 USO in yellow did not react to a lot of geo-political news about Iran, it seemed as if someone knew something. In red USO started trending down and in green we saw a strong move up, which I have thought to be a shakeout as the move was blamed on geo-political tensions, even though USO didn't react to them and even started trending down over the course of 3 months. The talking heads line, "This spike is because of Iran" didn't make sense.

 On the 60 min chart you can see the trend down to the left and the move up (shakeout) at the green arrow. The last time I did a full update on USO I noted the head fake move in yellow, which is usually a sign of a reversal and USO started lower from there.

 The daily min 3C chart went negative at the consolidation, the trend down and again on the move up, it was leading negative at the trend down.

 Here you can see the head fake move from the move up in yellow and how that sent USO lower on a 3C negative divergence.

The same is seen on the 15 min chart.

Take a look at the intraday chart...

And why? The US and UK just announced they will release strategic oil reserves.

I'll keep my short in place on USO as it has always been meant to be a longer term trade, however, this should be interesting as the USS Enterprise is now about 4 days away from the Iranian theater of operations, joining two other US aircraft carriers, which is strange as their are never more then 2 on station in the 5th Fleet AOR.

Are we about to hit Iran?  All I now is the market does not like uncertainty.