Our long term and intermediate term USO analysis has been held up by short term chop, today since the EIA data confirmed last night's API data, we are getting very close to the break in support hat needs to happen for out intermediate term situation of a pullback in to accumulation to play out and our longer term primary trend upside reversal in oil in which instead of being short, we'll want to be looking at core/trend long positions, but first we need that decisive break back in to the base's range which has been stymied by a lot of range-bound chop.
While the charts were too fuzzy to warrant keeping time sensitive July 17th puts in place with a decent double digit gain, I did decide to keep the USO equity short in place which is now at a near 9% gain for us, not bad for no leverage.
USO's daily chart shows price already back inside the base's range, but the range-bound chop has to be decisively broken to the downside around the $19 level which we just keep moving closer and closer to today.
Once that happens, we could move as low as $16, but we'll watch the 3C charts and let the market tell us what to expect, which at some point should be accumulation of the break lower setting up our next trade which is the larger trade by far, a long term/trend long for an upside primary trend reversal in oil.
The intraday chart is in line with the downside and yesterday's late day divergence before the API miss at 4:30 caused me to question whether or not the oil inventory data was being leaked again as it was about a year ago.
The 3 min chart is the actual chart posted last night in the Daily Wrap in which I wondered whether there were data leaks again as you see the sharp distribution in to the close before the 4:30 API inventory data was due out yesterday.
As for the intermediate charts that have been pointing to a break lower until recent action turned more positive, leaving me to question whether it was a change in character or just noise, looks like it could be noise or a change in heart should 3C break lower and take out that flag-like range in 3C.
For now, I'm VERY happy to see that $19 area being challenged, this is what we have been looking for.
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