USO Update

We have been in and out of USO more times in the last week than I can remember without going back and looking.

 We closed a put on 6/4 at a gain, opened a short term call/speculative on 6/5 and closed it yesterday at a gain, now back to the initial position I sought to replace which was the Put position closed last Thursday as a bounce looked likely, but the intention was always to replace it at a better price point with less risk on a bounce, that is what I've just done. *The yellow area where we opened the new call position/long is a head fake/stop run which as usual, comes just before a trend reversal (to the upside).

Since this morning Crude futures have been reflecting distribution...

This morning's CL/Crude futures showing a negative divergence before the EIA Crude inventories at 10:30 a.m. which beat with a large draw down of 6.81 mm bbl, way better than the 3.46 mm bbl draw expected, yet Saudi oil output rising to a new record high seems to be what the market is concerned about.

 Either way, crude stumbled and held some ground after the EIA, then it started seeing a sharp leading negative divergence (2 min) intraday.

 The 10 min (and 15 min) charts have always shown this as the highest probability, that crude has more downside to go and more base building to do. This close up 10 min chart shows a leading negative divergence where the recent bounce that caused me to close the Put position on 6/5 and open a call on 6/6, thus the probabilities were always that it was going to fail.

The larger view of the same 10 min chart shows what looks like a channel buster that has failed which usually brings a swift reversal (down).

So maybe the daily chart will show us a bearish engulfing candle today.