SCO (Long) / USO Update

With the Euro up and the $USD down this morning (remember the triangle from yesterday), you might think USO would be higher based on the lower $USD value as crude trades in US Dollars, not quite the case this morning thus far (remember the EIA Petroleum status report is tomorrow at 10:30 a.m.).

Our SCO (2x short crude) is just in the green, near brea even, here are the updated charts that still suggest the near term/short term trend (week/s) is still up for SCO and down for USO (long oil).

SCO (2x short oil) from yesterday gapping down and then filling the gap to break-even like much of the rest of the market (except the opposite with risk assets gapping up and retracing or fading back down)

The USO 10 min chart still shows the same negative divergence in the near term trend that caused us to look at / enter SCO long.

 SCO 10 min still has the same positive divergence as you can see, it lifted SCO off the opening lows yesterday.

 Opening action in USO is positive on the 1 min, which appears we will see at least an effort to make a gap fill, which is what the EUR/USD overnight trade would suggest, it's strange USO opened down like this today with the Dollar down.

SCO is giving the exact opposite opening 1 min intraday signal as it is not confirming the gap up in early trade and also looks to make an effort to fill the gap. I suspect we won't see too much movement either way until the EUR/USD resolves around that triangle and the $1.30 level, but I'll be keeping the SCO long open for the time being.

 USO 2 min this far shows the negative divergence on yesterday's open and so far is in line this morning, whether the 1 min chart will influence the longer charts or just intraday trade (gap fill) remains to be seen, but will be of interest.

SCO for its part on the same timeframe shows the exact opposite as it should, positive late yesterday sending it higher this morning.

My decision to leave the oil short open for now has nothing to do with morning/intraday trade, but is based on the longer term 10 min charts still showing the probabilities are to the downside for oil in the near term trade or short term trend (week/s).

However the currency/oil and even equities relationship is quite odd this morning.