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Based on the above decade-long perspective, no, it is not a good time. There is a huge 3 year balance that crude has been in, and it just broke up out of that. I don't know where a stop would be on such a position if you will use one, but it would have to be > 120 IMO if you shorted right now. I would not risk $13K on this trade though (and that's the smallest risk, with only 1 contract).
I would wait for more unfair prices at the very least at 111-115, and likely 120, and then I'd need to see some multi-day activity that convinced me that it was failing. As of this moment, it looks to be succeeding rather well in its breakout, so for me the price is not right, the activity is not right, and the risk/payoff is just too low. Where would the target be on such a trade? First I would wait for 115 or higher to trade, have about a $5 stop, and target where else but low 90s, the point of price control and breakout point. A secondary target would be the other end of balance between 65 and 70.
Ok, well in that case, the risk absolutes are obviously different, but looking at USO, in answer to the post #1 question "Is it time to short crude oil?" my response personally is still no. Perfect short in my book would be USO $46, with a stop at $50, for move back to $33 and then $30. This is based on your time frame of about a year. If looking to short on a smaller time frame, I still see no good case for it at this time based on price point and market activity.
Have you looked at the tracking quality of USO vs crude? If one is going to trade the USO, and I certainly don't recommend it for anything other than a day trade, the short side is the way to go!
I purchased USO in 2009 for $34 with crude at $40 a barrel. I was fortunate enough to get out of my trade for a scratch maybe 6 months later even though crude had risen 50% (or possibly even more, the details are fuzzy). I swore it off ever since. I see that today with crude trading ~108, USO is printing $38!!! Its a total joke that gets eaten alive by the roll every month and there is no doubt in my mind it is going to zero eventually. (though they would close it before hand I am sure...)
furthermore, I cant believe this product is allowed to exist. how much money has the public lost investing in this crap product??? Why does the SEC allow these garbage products especially ones like triple leverage inverse short molybidium??? I made that up and sorry for the rant but this really bothers me!
