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USO: Et Tu Brute?

|Includes:The United States Oil ETF, LP (USO)

If we are to have runaway inflation, would not oil be consolidating for a sustained push higher?

Looking at the chart of the oil market proxy, The United States Oil Fund LP ETF (NYSEARCA:USO), we see that inflation is nowhere to be found.

(click to enlarge)USO Weekly ChartClick to enlarge

Chart by StockCharts

In fact, just like the iShares Russell 2000 ETF (NYSEARCA:IWM), the USO is showing a rising wedge termination that is now proceeding lower.

Our premise is and remains that we are experiencing a significant across-the-board trend change.

As stated in the previous post on the IWM, be on guard for the "it's a buying opportunity" crowd. Here they are........

The position that has been established in the Direxion Russell 2000 Bear 3X ETF (NYSEARCA:TZA) is action taken in response to the analysis that the next sustained major move is lower.

Even so, anything can happen in the market. A good stop location for the position in TZA, would be in the 13.56 area (this week's low).

Disclosure: The author is long TZA.

Stocks: USO