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Friday, September 9, 2011

USO downtrend resuming

Oil sold off hard overnight, and continues lower today.  By my count, it is somewhere in subminuette wave iii down.  For confirmation, we'll want to see a full five wave count, ideally taking out the prior subminuette wave d of minute wave ((iv)) at 32.44. 

Strategy:  As I posted previously, I'm short the USO since 9/7 via a vertical put spread.  Assuming the USO breaks out of the triangle as indicated above before minuette wave (i) down is complete, we should head up for an A-B-C retracement for minuette wave (ii).  I will at that time attempt to buy back the short leg of the put spread, essentially uncapping the position for maximum gain.

Posted by Waverunner (FractalTrader) at 9:39 AM

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Notation


Wave DegreeMotiveCorrective
Grand Supercycle((I)) ((II)) ((III)) ((IV)) ((V))((a)) ((b)) ((c))
Supercycle(I) (II) (III) (IV) (V)(a) (b) (c)
CycleI II III IV Va b c
Primary((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))
Intermediate(1) (2) (3) (4) (5)(A) (B) (C)
Minor1 2 3 4 5A B C
Minute((i)) ((ii)) ((iii)) ((iv)) ((v))((a)) ((b)) ((c))
Minuette(i) (ii) (iii) (iv) (v)(a) (b) (c)
Subminuettei ii iii iv va b c
Micro((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))