USO

Yesterday in this post I showed you 1) how badly oil deteriorated from Friday on the NYT article that uncovered the truth about Chinese manufacturing, something we've been saying since mid-2011 and 2) how there was a very recent change in character for the better in USO yesterday.

In this later post, I showed you how some of the timeframes that were teetering on positive divergences and were suspected to put in positive divergences, actually did.

So now I finally have 1 of the USO call positions in the green to the tune of +32%. USO is in an area where it is in a little danger of losing some intraday gains, but it's also interesting because of how it is trading on the bear trap. So lets take a look at USO today.

 This is another of the many descending bearish consolidation/continuation triangles we've been seeing everywhere and most look like they are bear traps as technical traders are just too predictable, they make it easy for Wall Street. USO broke below the triangle and volume was huge, those weren't longs stopping out, those were shorts coming in on price confirmation of the bearish triangle.

 Today USO is up and spent most of the day trading just below the resistance of the triangle, then it broke lose and went through resistance, volume picked up (I'm sure some of that is short covering and it did it despite this...

That's the Euro leaking off a bit intraday (I confirmed it with the $USD as well) which means the $USD is moving up intraday and that is a drag on oil, yet the shorts were tagged. USO may lose some ground intraday from here now that they've hit those stops.

 The 3 min trend going in to the triangle, note 3C is positive during the triangle? This is why I suspected a bear trap was being set, note the leading positive divergence as USO broke below the triangle!

 Even the 30 min chart went leading positive at the lows yesterday in USO. The chart hasn't caught up to confirmation yet, but this is a slower moving chart, but that gives you some idea of how powerful of an event yesterday was, someone knew something before everyone else.

 The divergence yesterday even shows up on a 60 min chart!

 Look at the intraday action, I suspect they (you know who they are) saw the dollar gaining ground and new they'd need to push USO a bit to hit those stops, so look at the 1 min positive divergence just before USO pushed through resistance despite a dollar that was moving higher.

For shorter term trends, the daily Trend Channel stops out the short at $30.95, I'd like to see a close there, we may not get it if the $USD keeps gaining ground today, but I'll continue to hold the USO calls as I believe we still have lots of upside, especially if the Euro does kick in to a short squeeze, it is in the right place.