Crude/USO are not looking very robust here, in fact both the USO charts as well as the Crude futures look downright ominous as USO appears to have put in a 2 month counter trend bounce (rally) which also appears to coming to a swift end.
Last night Chinese data was released, mostly in line with expectation, there was softening in imports as growth was expected, rather the data showed contraction. For crude oil, notably Chinese imports of crude fell off to a nearly 2 year low. This of course can be tied directly to the contraction in manufacturing.
Here was the underlying weakness in USO seen just before a downtrend started followed by a head fake move out of the downtrend which failed. The retracement of the downtrend from the Feb. highs to the June lows has been roughly 50% since the June low reversal. Be sure to look at the 4 hour 3C chart below at each of these areas.
The weakness during Q4 2011 with the head fake move in yellow that failed; the positive divergence at the June lows for a counter-trend rally and that having turned negative now.
A closer view of the counter trend rally on an hourly chart.
The congestion/range at the top of the countertrend rally with the 3 min trend deteriorating just as the hourly/ 4 hour charts.
The 2 min trend at the same area.
1 min trend at the same area, despite a lot of choppy volatility in the range, 3C has moved to a new leading low.
Intraday/today (and Friday), a break above Friday's close sees an intraday negative.
2 min chart on an intraday basis with a few very small areas of accumulation, really just enough to create these choppy waves. Reversals of a trend that are several months long are a process rather than an event.
The 3 min chart is in line, we'll watch for any changes here.
CL or Crude Futures...
today's action pre-market and presently.
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