You need to know this fundamental change in oil's character

Swing Traders focus on two key elements when assessing a stock's trend, volume and price action.  Volume often precedes price action as the big players leave footprints that are tough to hide.

During oil's parabolic downtrend, volume has consistently shown a distribution pattern while basing before it's next leg down.  However, the current volume pattern has changed the character of the oil ETF, USO.

Notice that the current basing range over the past 8 trading sessions, we see increased volume.  Not only has there been an influx of volume, the pattern shows positive accumulation, as upside volume clearly outpaces negative volume.

This often occurs before a strong bounce or change in trend.  When I see this type of clear change in character, I start accumulating.  I already have a position in oil and may look to add some more.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis,setups and trade alerts, sign up for a 14 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

Trades: USO, RIO and EWZ

I had internet problems yesterday and was not able to post the following trades:

I sold 400 shares of RIO at $34.25 (entry at $32.25) for an $800 gain (+6.2%).

I sold 500 shares of EWZ at $48.00 (entry at $46.10) for a $950 gain (+4.1%).

I sold 500 shares of USO at $48.10 (entry at $46.80) for a $650 gain (+2.7%).

I still like all three of these stocks, and the corresponding sectors, but all three are a bit extended. If I see a nice pullback to support levels, I may re-enter. I know this may be a case of overtrading, but the fact that all three are near resistance levels makes it seem at least somewhat prudent to take my profits.

I am still holding CAL (short) and BLUD (long).

Today's Trades: CAL and USO

I re-entered a 500 share short position in CAL at $41.60. This is an aggressive play, as the stock has not yet broke the forming head and shoulders pattern.

I also bought 500 shares of USO at $46.80. My target is $50, which is just under the 50 day moving average. The MACD and RSI look good, although I am a little concerned about the lack of volume on this upswing, in relation to the volume on the downturn. My gut is telling me to ignore the volume trend becausethe increased volume on the downswing is a sign of capitulation (note that volume during the "meat" of the move was actually quite low), but only time will tell.