USO Follow Up charts

I do have ERY (Leveraged Energy Bear) as a core position for now and you might think I'd close that, I decided not to because it is a long term position and it fits with the long term charts, in any case it is Energy Short, that's an entire sector, not one fuel. If I were trading my normal 6 position portfolio, I'd probably do something about that as it's a lot of commitment to a sector that is or has a correlation with the particular asset, not all the time, but sometimes.

I'm going to do this update with USO alone as I suppose most people would be trading USO over Brent Futures, but if you need charts for Brent over WTI, let me know, they actually do diverge from each other from time to time.

 A) is a large triangle formation after  several years of chop. B) is a channel we knew was going to fail, but expected a short shakeout sooner, unfortunately commodities are dictated by more than Goldman's trading desk. C) is a bearish descending triangle and it was this triangle I suspected we'd see a head fake move at, a failed break under, etc. D) is where we are today, just under some local support with some interesting things happening so it could easily qualify as a head fake move.

I'm a little hesitant to go with anything too long in duration so I chose Calls. The fact that China's manufacturing PMI ticked up in October over September (Oct. is usually slower) may be helpful for oil, shorter term I think the $USD may be helpful.

This is that local support I told you about, look at volume as the price pattern rounds over (remind you of any major markets like any of the major averages?) 

A break under that support on heavier volume with bullish hammer-like candlesticks looks very interesting taken with a few other charts. I find bullish or bearish candlestick patterns are probably twice as effective when they have a noticeable uptick in volume.

 The $USDX has been on a tear since the lows of the 24th, but price recently is getting too parabolic near resistance, that looks like an opening for dollar denominated assets like oil, perhaps PMs and historically stocks, but there have been all kinds of variations of legacy arbitrage the last 4 years with equities.

60 min USDX chart

This is the intraday 1 min $USDX and it does seem to be hitting head winds right now, interesting considering where USO is.

 The 15 min $USDX chart looks like the shorter intraday charts are on to something that could stick for a bit.

This 4 hour 3C chart of USO is why I don't want to close long term energy short core positions. A strong counter trend bounce is one of my favorite things to trade, a trend is my favorite thing to trade and the highest probability over the longer term as we see it here looks like ERY should remain open, I would prefer not to open a new ERY position right now, but we do have to make the distinction between crude oil and the Energy sector, HUGE DIFFERENCE.

 60 min USO has that positive I've been following and I'll show you where I have been expecting it to run to.

 The 30 min chart is more detailed and shows the distribution in the channel sending USO lower, but also the large positive divegrence so I do think a short shakeout is probable.

 Intraday 3 min is positive and we have that volume I like to see and more importantly big money likes to see.

The 5 min chart is in line too, so we have the strategic charts in place and it looks like the tactical are coming on line with the $USD probably providing a catalyst for a spark.