USO SHORT / SCO LONG

Let me show you the charts first and then what I think would be the highest probability trade, personally this is the only way I'd take it because probabilities are one thing, but high probabilities which includes good positioning on your entry, lower risk, better timing and in better shape as far as market behaviors that we know are likely go.

 USO 5 min-the 1-3 min intraday charts aren't anything special, there's no strong edge on them, this is one of the 3 reasons why I prefer to wait for the set up I will show you.

The 10 min is leading negative which means oil has had some damage done to it on this run, lots of distribution.

You see it here on the important 15 min chart as well.

Now, SCO the 2x leveraged short on Crude.

 The 3 min intraday chart is in better shape here, leading positive and there's a nice flat range, perfect for SCO accumulation and USO distribution as we have already seen.

 The 5 min chart is positive in the right place for an SCO long.

The 10 min chart is leading positive and by this time you should be noticing that 2 ETFs in oil, both managed by different companies, different leverage, different volume are both confirming each other.

This is whAT I'D LIKE TO SEE, THE RANGE IN USO IS WAY TOO OBVIOUS. I'd like to see a head fake breakout above the range in USO (below the range in SCO) and see USO's negative divergences get worse in to the breakout and the 1-3 minute charts fall in line, SCO should show accumulation in to a head fake break to the down side. Because this range is so obvious, Wall Street knows there are traders who will buy the breakout of resistance, this is where they can sell USO or if they already sold it, short USO. The head fake move is one of the last things we see because it also creates momentum, in USO'd case (a short), the longs buy the breakout-as usual they chase and call it confirmation. Wall St. distributes (selling or short selling, both cross the tape as distribution/selling) and when prices fall back below the range, most stops will be right under causing the first wave of stops to be hit and volume to spike creating more supply than demand and sending USO lower even faster. Remaining longs are now hurting and scared of the failed breakout and enhanced downside momentum, they sell their positions at a loss and create more supply that sends USO down even faster. Whatever longs are left (maybe longer term investors or other traders) are now getting scared and selling. These are two of the reasons for a head fake move and the move itself allows you a low risk/high probability entry, 3 good reasons to wait and see if we get that.

This is patience, this is letting the trade come to you, it's high probability and if it doesn't happen, there's always another trade.