Crude Futures

First let me remind you that tonight/today after the bell we have the API Oil inventories which has been a bit volatile and the 10:30 EIA inventories tomorrow morning which also has been a bit volatile as they have seen 2 weeks of draws, but that has been offset by increases in production.

As for the $USD legacy arbitrage ($USD Up/Crude Down - USD Down/Crude Up), I'm still expecting a $USD bounce.

In fact the signals for a $USD bounce are so thorough and consistent (although not huge), it makes me wonder if there is an F_O_M_C leak as tightening (rate hike) should send the $USD higher, this is separate from carry trade considerations, it's just a normal reaction to policy tightening which is one of the reasons the F_O_M_C has mentioned the strong $USD so many times this year in reference to hiking interest rates so obviously positive divergences suggesting a move/bounce higher in the $USD are a bit suspicious the day before (or even several days before) the F_O_M_C tomorrow.

At the same time I have also said I believe the Euro will see downside with current negative divergences, thus a lower EUR/USD. To be fair, this could certainly be a reflection of what's going on in Greece.

In any case, here are the charts for Crude Futures with negative divergences suggesting the near term move lower that has been expected in crude (these are Brent futures).

 The 3C charts have done an EXCELLENT job confirming the downside moves in crude as you see above, but not just on a 3 min chart, on all of the timeframes.

Here's a 5 min chart with good downside confirmation and what looks like a gap fill (in USO cash) with a negative divergence in the area.

 The 10 min chart also confirmed lower prices with a negative divergence in the area which I suspect is a USO gap fill.

And the crude futures 15 min chart with a negative divergence and otherwise good downside confirmation.

With USO solidly below $20.25, we can start looking for signs of the next trade set-up/entry which would be a long term trend long position for a trend reversal in oil. Interestingly the base and this trend reversal I've been looking for developed a few months BEFORE inventories started seeing draws.