USO Short / SCO Long

This is a position from yesterday, SCO (2x Long Crude), keep in mind a stronger $USD pushed the price of crude down as a general rule.

First USO...

 This is most of yesterday and all of today on a 5 min line chart, what does this look like to you? If you said a bull flag, which is a bullish continuation/consolidation pattern, you'd be correct. In addition to that, USO has been in a lateral consolidation (we know that these are often used for distribution-this is why dull/quiet markets are usually where things are happening) so considering this is a breakout from that range, it looks extra bullish to Oil bulls.

However, the long lost art of volume analysis (volume is probably in the top 3 most important indicators to me), this is NOT the kind of volume confirmation one expects from a bull flag, volume should decline almost diagonally as the flag portion pulls back, so clear a trend line on volume is easily drawn.

However most people are attracted to Technical Analysis out of laziness and in 2010 when the market was just getting started, they didn't even bother to check the volume on what everyone thought was a H&S top, it was just a random price pattern that looked like a H&S and went on to make higher highs.

Now look at today in a different context, what does it remind you of now?

This is how Technical Traders are so easily manipulated, they react the same way every time to these patterns. If I were running the show and making the market in oil, I'd run price up above the flag to make it look like an upside  breakout or the continuation of the bull flag they'll suspect, draw in the longs which many probably are already there or today's breakout from the range and then slam the door with a move below the recent range forcing them to sell and sending USO down quickly. "FROM FAILED MOVES COME FAST MOVES".

 USO 30 min, I didn't draw the 3C divergences, just the areas where they'd effect.

The 15 min chart has a remarkably similar pattern to the 30 min 3C chart, it's a bit more extreme and developed, but it should have more detail as a faster timeframe.

Even the 5 min chart looks similar, look at all of the charts and what 3C looks like today in to this "Technically" bullish-looking price pattern.

On a 1 min chart we even have one of those areas in yellow, I included the 1 min so you could see today's intraday action and compare to the 2 min chart below, keeping in mind the concept of "Migration of the divergence".

Interesting?

 Since I've made the case with USO, I don't need to post that many SCO charts, but here are a few.

 1 min looks like the mirror opposite of USO's action, that's good confirmation and we even have one of those areas in yellow.

 As for migration, the 3 min chart shows that and more...

I just thought you might find the overall trend in large money flows of the 60 min chart of SCO interesting.

If I could, I'd add to SCO long today.

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