USO Trade Idea

I'm going to enter a half or maybe even a quarter position, if it makes an intraday move I suspect it will, I may add to that, but I view it as a bit speculative because of the longer term trend and I want to be able to shut this down quickly if need be. I would likely use SCO (2x ultra short crude).

Many of you may remember a lot of the longer term USO charts and expectations as we covered it pretty heavily.

 On a daily chart we identified #1 as a distribution area, it fell and started accumulating at #2 forming the very common (this week) "W" formation with a head fake move at the second bottom just before lifting out of the base and #3 it's hitting resistance from the Dec. 27th highs.

Here's the same chart with 3C.

#1 is the distribution on a 4 hour chart, #2 is the accumulation at the "W" and #3 is where we are now.

As for intraday charts, the 2 min is in bad shape as an intraday trend

As is the 5 min

The 10 min is one of the sharpest negatives.

The 15 min is negative in the same area.

The 30 min shows the second bottom of the "W" and a negative at the current area.

That's a LOT of confirmation.

The primary trend though...

The 60 min with accumulation at the "W" bottoms has a negative divegrence, I'm not sure if it's a significant pullback or a change in character. The base is large enough to support a move up way bigger than this so it's either a significant pullback or they are changing their minds on USO long, either way, I think it can be traded short for at least a swing trade,

This intraday 1 min chart had a positive in to the close and it gapped up, everything after this is negative, but intraday there's a decent chance of a move back toward intraday highs and this is my reasoning for a partial position, if we get back to intraday highs and the 1 min goes negative, I'd likely add the rest of the trading position.