I'm still not convinced on USO even though it is way oversold right now and there are positive divergences between 1-10 min charts in some for or another. Perhaps the F_O_M_C has some positive effect on USO, but for me it's still not enough to take a position based on the charts and I certainly can't divine what the F_O_M_C policy statement will be and how oil will react to it.
My core short in IOC has been acting as a nice hedge to the long positions and is now the #1 performing core short at +15% with no leverage.
As for Energy and ERX in particular since that was a long position started, I will add to ERX here. As you know I consider Energy, Tech and Financials do be indispensable to any upside move that has any staying power beyond a day or two and with the increased rotation, I feel I need to have that representation by Energy, not necessarily oil/USO, but Energy more broadly. The IOC short will be left in place as a hedge and hopefully it moves down with Energy / XLE/ ERX moving up.
This channel buster in ERX/Energy also formed a bearish descending triangle with a head fake breakout that failed-From failed moves come fast moves in the opposite direction and ERX broke through the bottom of the pattern as Technical traders would expect, this morning's break below serves as confirmation for retail traders to go short and they did in a big way as the volume on this break is bigger than anything I can see on my chart's history going back to July 20th! That's also perfect as it creates large supply that can be accumulated on the cheap, easily and without anyone suspecting anything as someone always has to take the other side of the trade.
ERX 2 min with some interesting leading divergences
The 3 min positive
And my favorite, the 5 min positive leading divergence.
For me, this is worth adding to ERX.
No comments:
Post a Comment