USO Update

USO's parabolic move up yesterday turned out to be exactly that as you'll see momentarily. I'm not reposting all of the charts that I just posted yesterday in, USO Reacting to $USD and Perhaps the API / EIA Set-up, but enough to see the [parabolic move and the apparent set-yp of the API/EIA scam, this time before hand rather than Wednesday morning, well ... I suppose it still worked out Wednesday morning.

My opinion of USO near term is the same as it has been, as reiterated yesterday and the USO equity short as well as the July 17 $20 puts are still open positions.

 Oil ran up yesterday in a parabolic type move,  I never trust these moves as they tend to end as dramatically as they started, just in the opposite direction. It seems this time rather than the Pump on the API data and dump on the EIA data, they pumped before both and dumped on the EIA this morning at 10:30.

 Here's a look at the mini parabolic move complete to the far right on a 15 min USO chart, it looks like it may finally crack below the $20 level which is where I have expected it to go.

 Here's the dump on this morning's EIA data (it has been a busy morning).

The inventories came in at a draw (8th consecutive draw down) of 4.93 mm bbl v consensus of 2 mm bbl, so why is crude heading down rather than up (other than the fact smart money wants to accumulate at lower prices)?

Because production rose again and this time it's near a new record cycle high, so crude sold off and when it's below $20, maybe as low as $16, I fully expect it will be accumulated hand over fist, as I said yesterday, but that's another trade and we aren't there yet.

The 2 min USO chart shows no confirmation of yesterday's move, thus it wasn't much of a concern.

As I mentioned above,  the USO equity short and July 17th puts remain in place.