Thank you. As with any trade, this one may or may not pan out but all you can do is wait patiently for an objective entry on a trade, take it, set your stops & profit targets and then give it time to play out unless something compelling develops in the charts that prompts me to close the trade out early. If USO is stopped out, we’ll either move on to the next attractive trade setup or possibly look to re-enter USO again soon, if the charts confirm. So far, so good but still some work to be done on this one.

Welcome & best of luck on the trade! FYI- I covered the near-term outlook & some levels to watch for crude oil in the second video that was posted today.

It should be fine unless crude chops around in a sideways trading range for an extended period of time without the stop or price target(s) being hit, as that is when the decay from the 3x leverage works against your position instead of for your position. As of now, I’m leaning towards closing this trade out if’/when T1 is hit & then looking to possibly re-enter again on a pullback but for now, I will leave the trade parameters as is & give it some time to play out.

Great question(s) regarding USO dipping below 11.66. An emphatic YES, I most certainly would consider that a momentum-fueled overshoot. I realize that I suggested not going long below 11.66 (*and stand by that suggestion) and while USO may very well blow right down past that level as if it wasn’t even there tomorrow & well beyond, there are some considerations here which help to explain why sometimes, one might opt to be a little more flexible with their trading plan.

1) USO (crude oil) had, what by just about all metrics, appeared to be a selling climax today. A quick web search should produce more comprehensive (and probably along with that, much more confusing/conflicting) definitions of a selling climax but in a nutshell, a selling climax typically comes with an unusually outsized red candlestick (or series of recent candles) accompanied by a noticeable large volume spike (or recent surge if multiple candles IF & WHEN that occurs following a significant downtrend. Definitely a checkbox for a potential (key word: potential) selling climax in USO & /CL today.

2) Due to what can only be described as extremely strong downward velocity in USO/crude prices, especially today but even recently as well (all the better), an overshoot of the 11.66(ish) support wasn’t only acceptable but almost guaranteed. When I posted the setup, USO was just coming on the 12.14 level & moving down but not with the same velocity that it was when it hit & overshoot 11.66 (by 4 cents) shortly thereafter. As such, if Webster’s dictionary was to ask me to define the term “momentum-fueled overshoot” (a term I made up years ago), I would include a screenshot of today’s USO chart (assuming that it holds this level & rallies from here… ;-) )

3) The fact that after USO overshot 11.66 on the most powerful single-day drop in many years, on the heels of the sharpest correction many years to boot, only adds to the chances that USO would have (and did) make a momentum-fueled overshoot of that key support level.

4) The asterisk* in the first paragraph above means that from the time that USO dropped below 11.66 and until it traded back on or above that level (i.e.- slightly over 1 whole minute today), I would have held off entering or adding to any position in USO as it was trading below a key support level which could have opened the door to a significantly more downside. Add to that (no number 5 as it’s late here & I need to shut down for the night), That momo-fueled overshoot also looked like a text-book stop-pop on the 1-min chart (below) & intraday selling climax. As such, while I wouldn’t have bought USO at 11.63 at 3:48 pm, I would have bought it once it regained 11.66 a minute or so later, especially after prices quickly snapped back above that big red 1-min bearish candle that very briefly took it below 11.66