Crude Futures

The last post tonight we looked at manipulation in crude futures, there were no positive divergences in USO, but there was the start of a negative divergence in crude. Basically I'm wondering if crude will be brought down again to be accumulated for a return to Friday levels around $116 or whether we keep seeing deterioration in an asset that shouldn't be seeing deterioration given the geo-political risks and the F_O_M_C's QE3, thereby helping to confirm that the longer term charts and signals are still valid which would be huge given the the conventional wisdom toward QE, or we get information in which we make some adjustments and perhaps get some trade set ups.

In any case, the last time we looked at the Light Sweet Crude futures there was a negative divergence taking hold, that has just turned crude lower again, not in the same dramatic way as earlier today, but we these are the kinds of moves that will unveil information that will give u an edge over the crowd.

 The futures where showing a negative divergence coming off the initial positive divergence which bounced oil a bit, as you can see, the divergence has continued to move lower.

Here's a closer look of the Light Sweet Crude Oil future as the leading negative divergence turns crude lower.

Gold has a somewhat similar negative divergence and this is an asset that is very sensitive and positively correlated with QE, the question I'd like to be able to answer on some downside momentum is whether it's being used to pick up large positions on the cheap or whether QE3 has been discounted and/or perhaps there are some fears about the open ended nature of the inflation aspect of QE, "maximum employment within the context of price stability); as we are seeing now, price stability is not there and it is effecting manufacturing in every report we've seen thus far.

 Gold mini size futures (YG) 5 min chart with an established leading negative divergence that is already causing downward pressure on gold futures which also looks like a "Tower top".

The longer 30 min chart is also leading negative. If we can get a pullback to pre-F_O_M_C levels, it should be a trove of information on what the real smart money sentiment is regarding QE.

As for ES, the averages had a late day positive divergence, I would expect that the divergence in the SPY, QQQ, DIA, etc that formed late in the day to be fulfilled with at least some early momentum, that momentum holding is another question altogether as the 5+ min charts aren't looking great.

ES futures tonight (S&P e-mini futures) so far seem to go along with this line of thought, but everything changes when Europe opens and then again when the US opens.

 ES 1 min shows the same late day positive divergence that the averages saw, there was a little pullback, but now ES is back on track and confirming.

Th 60 min Es chart gives the bigger picture a totally different flavor, I'm not as interested in the relative negative divergence from last week as it was pre-F_O_M_C, but the leading negative since does have my interest.


Europe opens in an hour....