I wanted to short USO earlier in the week, the charts just didn't line up so I didn't take the chance. Yesterday USO was one of the assets that saw late day leading positive divergences and it opened higher this morning, so good thing I didn't make a move there.
Here's the EIA Petroleum report released this morning
Released On 7/11/2012 10:30:00 AM For wk7/6, 2012
| Prior | Actual |
| Crude oil inventories (weekly change) | -4.3 M barrels | -4.7 M barrels |
| Gasoline (weekly change) | 0.2 M barrels | 2.8 M barrels |
| Distillates (weekly change) | -1.1 M barrels | 3.1 M barrels |
We have a slightly larger draw than last week in crude inventories, however USO's barely reacted, the biggest reaction was from yesterday's late day positive leading divergence as USO gapped up well before the inventories were released.
Here's the reaction to the release...
Like I said, barely reacted, the main reaction came from yesterday's positive divergence late in the day (the last hour) as well as the short term positives in the Euro and short term negatives in the $USD, which confirm the move in USO this a.m. as being in sync with the short term move in currencies along the lines of the correct correlation (at least for the short term).
Yesterday's surprising and very fast leading positive on a 1 min chart
The same can be seen on the min with an overall positive trend in 3C, which is why I couldn't open a short position and I'm glad I didn't. This is why patience and waiting for the right set up are important.
The 5 min chart was pretty much in line the last several days and only went positive late yesterday, it continues positive today-another reason I wouldn't open a short position in USO.
The 15 min chart is negative, not in a huge way, but enough that I wouldn't want to be long USO either right now.
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