$USO may have found support 08-15-2014The bullish harami at support may be the beginning of a reversal. Tension in Ukraine will help crude oil go higher. The broader momentum is still negative but a bounce may come here.
USO trade ideas
Beware Of This Scary Pattern: $USOAs the overall markets fall sharply today, the United States Oil Fund LP (ETF) (NYSEARCA:USO) which is a popular ETF that tracks the price of oil has put an extremely bearish pattern in place.
Today, the United States Oil Fund LP (ETF) (NYSEARCA:USO) gapped down below a major trend line, triggering a Head and Shoulders top around the $36.92 level. This ETF is now trading around $36.40, down close to 1.50% for the day as the sell off intensifies.
The United States Oil Fund LP (ETF) (NYSEARCA:USO) will have some support at the 200 day moving average at $36.13 but the only ultimate target will be $34.40.
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Short Term Bottom in Oil I've noticed the price of gas has been declining for about three to four weeks. Come to see, Oil has been in a free fall for a month now. From the bottom in mid-April to the high in late-June, the 61.8% provided a technical level that prices could bounce off of. Even when the harmonic patterns aren't evident, the harmonic ratios are always close by dictating prices.
The volume increase we saw as prices approached the 61.8% fib, to me, confirm the bottom we've formed. Again, lower prices spur buying, appearing as a bargain for some. With the addition of RSI Divergence, I feel we go up from here but I can't say for how long. My job's to trade what's given to me.
That being said, I'll wait on the sidelines until a buying opportunity presents itself or selling becomes to the new bias, allowing me to act accordingly.
US OIL FUND (weekly)Three resistance levels in front of US Oil fund. I'll buy at each breakout. It was 116.0 before 2008..Oil prices could stay high for a long time due to geopolitical events and increasing demand.
Trading US OIL using RENKOPrinciples
4 bars can set a trend ; MA 20 & 50 as a direction guide
retracement 1,2,3 bars ; or 4 bars if trend greater equal 10 bars
Consider counter trend when RSI came back from oversold /bought area
Entry method
1) enter on retracement (1st bar aggressive) + cross MA
2) enter on SR break + cross MA: SR can be a 1~2 bar range
3) Enter on double bottom / top + cross MA
In chart: Triangles are entry ; arrow / channel are SR
USO=> IRAQ/UKRAINE ENERGY CRISISDue to the issues in the middle east the worlds oil prices are gaining at a rapid pace.
In the event the city of Baghdad falls or the southern territories fall the surge in American Oil will be explosive.
The stock currently is in a out mode based off the upper indicators which I will not get into however the price which will continually rise of 38.853 and better will continually move the price of this company higher.
Yesterdays surge in volume will only be confirmed by today's crisis in Europe and Middle East will probably lead to a higher price for domestic oil due to the fact we import 30% of our oil from Iraq.
$USO hits trendline resistance setting up a reversal 06-11-2014USO continues to form a rising wedge which will ultimately create a larger selloff. Until the larger pattern forms, price's range will tighten in the pattern which is now poised for a selloff. The combination of the spinning top candlestick and the stochastic rolling over will bring lower prices in the near term but not for long as the distance between the rising trend lines continues to narrow.
$USO approaching multiple points of resistance 06-09-2014USO is rallying in a rising wedge that will eventually setup its selloff. In the short term it is reaching the highs of ~10 days ago and near a rising line of resistance as well as a horizontal line of price resistance. A little more rally may occur but it should be capped under these lines wherein a short term selloff will follow. The stochastic is setup for a selloff now.
$USO selling will be short lived 06-05-2014USO is now below the LSMA and a bearish crossover has occurred but I don't expect to see much of a selloff. Price is likely to dance around the support/resistance line of $37.55 giving the stochastic a chance to reset for prices to move higher. The rising wedge has a lot of room to run and prices will rise to the $38.75 area quickly once this consolidation has completed.
USO weekly options expiry - small net short for institutionsThis week's options expiry suggests institutions will end the week net short about 600 contracts or about 60,000 shares. They had a vested interest (net 1500 contracts) in ensuring price did not move below $36 and I see they have basically done exactly that. Considering seasonality issues, one shouldn't be surprise to see their net short exposure. The question really is, what is their actual cost on that net short exposure (ie. strike - avg. premium collected)? Because of the significance of the $36 level, long ideas worked well today. I was fortunate to play a BoT long but there really wasn't a long Euro close into Options expiry setup to take. Regardless, that bias off the $36 level may evaporate once the expiry event occurs.
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USO Weeky options expiration follow upToday was another options expiration day and with it comes some interesting information about current market structure and where the smart money might be leaning going forward. While there was no 'freebie' Euro close rally into options expiration setup today (because Russian news keeps bidding price up) it was very interesting to see how 'they' closed USO out at 11AM pst at 37.45. This meant that the $37.50 calls all expired worthless and the same puts would automatically exercise. Because I believe the street has a net long exposure (off the imbalance of the $37.00 strike) there was incentive for them to bring prices back down in order to cover those short positions. Additionally, the rather large spread trade (1700 contracts at $37 & $38) coupled with geopolitical tensions made this week's reading a bit murky at best.
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USO setup for another weekly options expiryEvery Friday we have weekly options expiry and with it comes some interesting price action. If one looks at option open interest data one can glean an idea of where 'the smart money' wants the market to finish at expiration (11AM pst). Interesting here, we see the institutions have a lot of incentive (in terms of net exposure considering they write most options) to take price out above $36 but below $36.50. Additionally, one often gets a 'freebie' trade coming out of the Euro close (8:30AM pst) each of these Fridays. This short pocket of time is ripe for market manipulations and until the public catches on in earnest, i would suggest you try to take advantage of it. If interested in talking more about this market-anomaly or you have questions, please feel free to come to one of my tutorial sessions and we can talk lots about this and other setups.
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USO - Today's action reasonabl considering weekly options issuesToday's price action in the popular oil ETF, USO is quite understandable if you look at it from a derivatives perspective. Since the advent of weekly expiration options, one can get a reasonable idea of where institutions want prices to end up at 11:00 AM pst three out of the four Friday's of each month (monthly expiration has a game plan of its own). Today, USO finished at exactly $36.50 on the 11AM bar, do you think that was a mere coincidence???....lol....
Today's TUT - Understanding Friday's Option's expiry setupFriday's are an especially fun day for me because the market often gives you a nice little treat. That being the fact that quite often buying the Euro close and holding into the weekly options expiry can translate into a nice little stack of money for the weekend. Today's price action in USO (Crude Oil ETF) couldn't demonstrate the setup better. The market put in a very clean OTE long sweet spot tag (into the European close) and then reversed violently higher back up into the OTE short zone. Considering most Put options are written by institutions there is a vested interest for the institutions to take price out at/above a certain level. In this case, there was lots of incentive for them to take the market out above $36.50 and that is exactly what they did. Notice too, once the options expiry occurred, the original trend resumed lower.
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1hr USO - levels to consider trade setupsHere is a 1hr chart on the USO (Oil ETF). At the moment we are in a tough place. Neither at OTE long or short areas so atm I am not considering a trade setup. Should we get back up into the $37 area or down into the low $35 area I shall consider setups then.
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USO - Consolidation after bounceVery similar to CL1!, the oil ETF, USO, is basically consolidating after a nice bounce. Price here worked its way back up into the 37.50 area and is now working its way back into the Optimal Trade Entry (OTE) Long zone around 34.50. At the moment we appear to be in what I would consider a poor trade location area. If we are going to take risks we need to know where our 'I'm wrong' level is and putting a trade on at current levels would imply a very wide risk threshold.....hurry up and wait....
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Time to Short!The uptrend channel seems to end, it's now a good time to short with a good risk/reward ratio.
Our MACDBB still positive but did cross his lower Bolligner Band, so the short is valid.
The SuperTrend still positive, but it should change its polarity soon, and then act as a trailing stop.
Sell Stop around $35.89, target $33.86, stop loss 37.02
But beware, this is USA, very sensitive to major political and economical events, to be use with caution!
4hr USO - fast approaching bull ab=cd targetAs we approach our bull ab=cd target I can't help but notice our Willy21 indicator is suggesting we are over bought once again. Additionally, this last move higher has not been on momentum suggesting a bear divergence is building too.
4hr USO - bullish ab=cd in a little more focusAs is the case on the daily CL1! we currently have a bullish ab=cd harmonic pattern well at work. The price target here ($36.24) appears to be right into a higher time frame OTE short window with the sweet spot being $36.14. I for one shall be watching closely for that level as it will mean a nice AOCO exit on the BoT long established from $34.56. As of Friday, 'stop to trail' level has been hit ($35.48) and one should act accordingly at this point - basically locking in a profit.
4hr USOThe battle between BoT and OTE raged for days it seemed and now we can clearly see BoT longs have surged to their 'stop to trail' level being hit (WTG BoT!). considering how we will soon be moving back into our 'Stupid Over-bought' territory with a move to our bull ab=cd target. Once hit I would be reluctant to be too bullish after that event.
15M USOConsidering higher time short bias, really nice OTE short sweet spot tags on failure in price right on EIA report. Failed rally post report was key. Subsequent 'dead-cat-bounce' gave another opportunity to get short through the post Euro close session.
