The EIA Oil report came out at 10:30, although I don't have consensus for it, it did come in at a build and USO didn't seem to like that at least initially.
| Released On 10/24/2012 10:30:00 AM For wk10/19, 2012 |
| Prior | Actual |
| Crude oil inventories (weekly change) | 2.9 M barrels | 5.9 M barrels |
| Gasoline (weekly change) | 1.7 M barrels | 1.4 M barrels |
| Distillates (weekly change) | -2.2 M barrels | -0.6 M barrels |
|
When deciding what kind of Energy exposure to have in the mix as I added longs, I chose Energy more broadly with ERX rather than oil more narrowly as the signals continued to show Energy as a sector should outperform oil, take a look at the responses this morning after the EIA between oil and Energy.
Oil/USO dropped
Energy gained.
Longer term the 1 min trend has been putting in a positive divergence so a bounce in USO wouldn't surprise me.
Here's the 1 min intraday, negative at the EIA report and slightly positive as USO moved lower.
2 min also positive intraday, so far anyway as it is early.
The overall 10 min chart is leading positive and I'm starting to think USO will do some backing and filling in to the gaps above.
Since USO broke down from this price pattern, it has made sense, but the recent gap down yesterday on increasing volume is starting to look more like short term capitulation, which again would put the gap in sight for a bounce. With the F_O_M_C today, anything could happen, but based on what we can see now, the probabilities of a bounce are increasing by the day now since yesterday
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