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USO UTWI Trade Update

As of now, the USO/UTWI short trade still looks fine from a technical perspective as prices are still trading below the bearish rising wedge pattern although I do have to say that I'm a bit concerned regarding the lack of impulsive selling such as we normally see immediately following the breakdown of a rising wedge pattern. USO could make a run at a back-test of the wedge from below & if so, a back-test could come in less than 2% above current levels or USO could backtest at a higher level, possibly above the suggested stop of any move above 12.35. I don't plan to modify the stop, either lower or higher & plan to stick with the original trading plan on this one for now.

USO 60 minute June 6th

USO 60 minute June 6th

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Jun 6, 2016 10:19am|Categories: Completed Trades - Short, Gold & Commodities|Tags: , , |13 Comments

13 Comments

  1. schooner June 6, 2016 10:27 am at 10:27 am

    Hi Randy — I guess we both posted on Crude at almost the same time. Right after I posted the shorter term chart on crude I saw this post. My own theory is that the breakdown in the wedge may have just served to work off the short term overbought and set up a short consolidation for another push. I guess we’ll see soon enough.

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    • rsotc June 6, 2016 11:11 am at 11:11 am

      Yes, we should know soon enough whether or not those rising wedge breakdowns are going to play out for more than that very shallow pullback/sideways action or if crude is headed much higher.
      CL (crude futures) charts are a mess now, chopping around in a sideways range since a very clean rising wedge breakdown in mid-May although that wedge breakdown did hit the measured target as well my first of 2 profit targets. Regarding ETNs, I prefer to trade & chart USO over OIL although OIL is certainly worth watching. Here’s my 120-minute chart showing a very well-defined rising wedge pattern, complete with divergences, that has yet to break down. Thanks for sharing your thoughts.

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      • schooner June 6, 2016 11:53 am at 11:53 am

        I would guess that at this very moment with crude trading in a bull flag on the 60 min chart at 49.70 there must be a pitched battle going on between the bulls and bears because if 50 is breached then the stop run should be explosive. That’s what I’ve had in mind for the last week or two — the potential for what happens if you can run those stops. It almost feels like the bears know that there is a ticking fuse here and they’ve got to get this bomb dismantled before it goes off.

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        • GetItRiight June 6, 2016 2:34 pm at 2:34 pm

          These pit close shenanigans are so sickening (if you are short). Crude rose almost 1% in 10 minutes, just before 2:30.

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      • schooner June 6, 2016 12:43 pm at 12:43 pm

        Looks like the bears had the firepower to defend 50 again. Big smack down in the last few minutes. Now the bears need to take out 49.25 — if they can, then I think the wedge is in play. Again, we’ll see pretty soon.

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  2. jegersmart June 6, 2016 10:38 am at 10:38 am

    FWIW, it looks like there will be a 1 mill bbl draw at Cushing this week. Who knows what the market may make of that though….:)

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  3. jegersmart June 6, 2016 12:16 pm at 12:16 pm

    Just FYI, if a million draw or so is what we will see on Wednesdayin terms of Cushing it may result in the curve flattening which *should* be supportive to prices because the “cash and carry trade” will become somewhat painful, and IF that happens I could see prices in the mid fifties without too much sweat. I don’t have positions, just fyi from my own view and of course some work to be done in terms of inventory draws. I would watch the curve, if it flattens out much more then you have to be careful shorting….all vimho….
    J

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    • rsotc June 6, 2016 12:33 pm at 12:33 pm

      Thx for sharing that jegersmart. You seem to have a good pulse on the fundamentals & supply/demand dynamics of crude oil. I’ll try to keep an eye on the curve & please keep us updated on any significant developments that you notice.

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  4. schooner June 6, 2016 2:50 pm at 2:50 pm

    I don’t really know anything about how crude trades in the pits vs. how it trades the rest of the time in electronic trading, but pits or no pits it was clear to me from the charts that 49.25 would be a pitched battle and sure enough that’s where the bulls turned it again. What’s playing out in crude as it tries to punch through 50 feels like Ali (RIP) vs. Frazier — this is a war — now it seems to be consolidating between 49.90 and 49.25 (where it had a morning star reversal on the 60 min chart) — as I’ve been saying for a while, there just seems to be an incredibly strong bid in crude that acts like it wants to break that 50 barrier and run stops. The longer term weekly chart that I put up earlier has a lot of room to the upside since crude broke out of the channel it had trades in for over a year.. On the weekly it isn’t close to being overbought.

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  5. schooner June 6, 2016 2:51 pm at 2:51 pm

    Jegersmart — I echo Randy — thanks for the fundamental info — please keep giving us your thoughts.

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  6. Gaucho June 8, 2016 10:00 am at 10:00 am

    Hi Randy @tsotc,
    USO hits the resistance and it is going up high with volumen
    Regards

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  7. Gaucho June 17, 2016 6:45 pm at 6:45 pm

    Hi Randy,@rsotc,

    Yesterday USO hits T1 (11.29) and went down to 11.11 Today went back to 11.69.

    OIL is doing what was shown in the above chart, going down to 5.95 and up towards 6.50 (today closed 5.30)

    USO next move T2 (10.77)

    Regards

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    • rsotc June 20, 2016 8:59 am at 8:59 am

      @Gaucho USO is trading at 11.83 in pre-market as of 8:55am (i.e.- at resistance, as with all US stock indices), where I’d expect a reversal or gap fade at, just before or shortly after the open. Here’s the 60-minute USO chart as of Friday’s close (not reflective of today’s pre-market trades):

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