USO / EIA Petroleum Report

I'm glad to have made the move in ERX (3x leveraged long Energy), even though it is the entire energy sector with services, etc, I don't think the EIA report and USO's response will be helpful in the near term.

Released On 10/17/2012 10:30:00 AM For wk10/12, 2012

Prior Actual Crude oil inventories (weekly change) 1.7 M barrels 2.9 M barrels Gasoline (weekly change) -0.5 M barrels 1.7 M barrels Distillates (weekly change) -3.2 M barrels -2.2 M barrels They never seem to release consensus for the EIA petroleum report like the Nat. Gas report, but as you can see we saw a build this week more than last week.

That being said, onc in a while USO will act very strangely/manipulated on EIA petroleum report days so we always keep an eye out for anything strange that might lead to a trade.

Here's the report...

USO's reaction after the report at 10:30...

 A pretty rapid sell off on this 1 in chart of USO and on volume.


 While the USO 10 min chart looks decent for USO to see some upside in this bounce we are playing, I have favored Energy over crude alone.

 USO's 3 min chart was similar to ERX's in that there was a near term negative divergence.

Most of this divergence came from yesterday's action of consolidation, as far as I can see, USO's price just does not have the underlying support it needs yet to start making moves like it did this morning. We'll keep an eye on it though as I think this is one report that is leaked a little more than most.