SCO / USO Quick Update

Our recent long, SCO (2x leveraged Bear/short Crude) is up +1.56% today, this is off a nice entry yesterday with a head fake move within a rounding base with 3C positive divergences, it was a really nice looking entry.

From looking at Crude Futures (CL), there's a large positive divergence, with the $USD signal I just posted intraday, this makes sense, a pullback in the $USD would be helpful for risk assets, especially crude.

USO confirms an intraday positive divergence out to 2 mins, which also makes sense, at 1 min it is likely a consolidation, with 1 and 2 min positive, it's likely a price correction, yet still a short term one as the divergence hasn't been strong enough to make it to the 3 min intraday chart.

SCO (our long) on the other hand only has a 1 min negative divergence, at 2 mins it is in line with the move higher this morning. The rest of the charts are perfect, this looks to be no more than a normal intraday jiggle.

SCO is positive out to the 60 min and USO confirms, this is one of the reasons and one of the positions that made me say yesterday, "I'm not moving any positions", they are set, let them work.

Here are the charts for SCO which I'm certainly holding and this is why I prefer an equity position rather than options, I can rise out the trend without a lot of moving in and out and hoping not to get caught without a chair when the music stops here and there.

 2 min chart shows the intraday negative is very weak.

3 min chart showing yesterday's head fake, I hope members embrace this concept, it is one of our best entry/timing tools. Yesterday the head fake was made below support at the yellow trend line, 3C confirmed the head fake move, this gave an excellent entry price, small risk and high probabilities, this is letting the trade come to you. The 3 min chart obviously is leading, but to what extent...

This is the extent of the 3 min chart with the head fake move-PERFECT SET UP.

I already showed the other charts in the trade idea, I thought this was interesting though, not only for USO short/SCO long, but for what it says about the $USD and therefore the market overall.

SCO 60 min leading positive divergence suggests a much stronger $USD, which trades opposite USO and the SPX.

As for USO 60 min, it confirms SCO easily, SCO long looks like a great trade, I'll be holding, I'm sure for a while and this also tells us a lot about the overall market vs the $USD, it doesn't look good, especially if the Yen gets involved and with South Korea's Rate Cut last night, that doesn't help the Yen's plight, it fits in with our long term analysis of the $USD/Yen from 5 weeks ago.