USO Update

Last night I said I'd update USO after the inventories this morning, but I'm afraid we don't have much in the way of new information.

This morning's 10:30 D.O.E. inventories confirms the API data last night, this is the first build in 8 weeks with the DOE showing a 2.386 mm bbl build with s light decrease in production on the week, but still at cycle record highs.

The reaction this morning in USO...

 The gap down is from last night's API build, the red arrow is the 10:30 a.m. DOE build, but so far neither data point has given us much more clarity on the near to intermediate term probabilities in USO which is why I prefer to stay away from the highly leveraged positions for now until we have a screaming signal that jumps off the charts, not transitional signals or noise.

 The move below base resistance has taken place, but is far from where I had hoped to see USO move to or where the intermediate charts had been suggesting.

 The same very recent change in the intermediate charts which were solidly pointing down are still there, although I wouldn't expect any changes this early on a 10-15 min chart based on data from 10:30 this morning.

However even the short intraday charts are not giving us much which is why I chose to take the USO puts profits and leave the equity short in place for the time being.

The 30 min chart as shown yesterday is still pointing to more downside, we should see accumulation in to that downside the problem has been we have been seeing signs of faint accumulation without the downside, which makes a high probability low risk trade set-up difficult.