USO Charts

We have the gap up, we are very close to the apex of the consolidation triangle, but we still don't have a solid, obvious breakout/head fake move which I feel strongly we will see that before USO is really ready to make a move lower.

To be clear, I'm viewing this as more of a swing trade or maybe a bit longer, this is not like the core short trades that we have entered, I wouldn't dare go that far out on oil without really strong long term signals.

The charts we have today, I'm sure you will find are not too different than what was posted in yesterday's trade idea for USO.

 This is more along the lines of what I'm looking for in USO, a gap at least in this yellow area, it has to look like a clear breakout or else the entire reason for the concept is moot.

 As you can see, gaps up lately haven't went well over the next day or two, but they have stopped at support of the triangle so that may be a target for anyone short USO today.

There always is the chance we get a Crazy Ivan type shakeout move before the breakout/false breakout that we are looking for and it would have to come soon with the triangle pinching, it might look similar to what we saw in Financials.

One quick false break down from the bullish triangle which we called as a false break that day and said we'd be looking for another on the upside, I don't think that upside move is done yet, but the point is USO could do something similar and have a bit more downside than support at the triangle would suggest.

 The signals in the USO 2 min chart have been getting worse, 3C is leading negative right now so it is primed for the head fake and break lower.

 The same on the 3 min chart

 And the 5 min

And the 15 min, so that' a decent move down worth trading, especially with a little leverage, but I wouldn't plan on a move too much bigger than something along the lines of a swing or slightly larger, I'm not calling for a bear market in oil here.