Midday reversals punish traders who stay mentally stuck in the morning trend. In this video, we break down a real midday reversal using USO — walking through how a news-driven flush changed the entire tape, and exactly how we traded it both ways.
We cover:
– How USO reversed on news after running up several percentage points
– Using VWAP as support and resistance to identify the reversal
– Why you need to let sharp moves settle before entering (don’t chase algorithms)
– The short entry: waiting for the new low to break, averaging in at the 25-period MA
– Reassessing the market — finding the other side of the trade when energy falls
– Confirming reversals aren’t head fakes using XLE, XOM, and CVX
– Recognizing signs of weakness before the news even hits (slowing acceleration)
– Why the morning tape is gone — and you need to throw away what was working
🔴 Live Example: USO was running strong, then a news-based reversal flushed it through VWAP. We waited for the algos to settle, got short on the break of the new low, averaged in at the 25-period moving average on the 1-minute chart — then flipped long when the tape shifted again.
📈 Key Takeaway: The market does not care what worked at 9:45 if the tape changed by noon. The tape at 9:45 is much different than at any other point in the day. Adjust to the velocity of the tape.
⏱️ Timestamps:
0:00 – Intro: Midday reversals punish stubborn traders
0:00 – USO reversal on news — the setup
0:31 – Using VWAP as support and resistance
0:52 – Let the move settle — don’t chase the algorithms
1:57 – Reassess the market: what does the reversal mean?
4:15 – Confirming with sector ETFs: XLE, XOM, CVX
4:35 – Making sure it’s not a head fake
5:55 – The morning market is gone — throw it away
6:05 – The market doesn’t care about your morning wins
7:27 – Adapt to shifting conditions or get crushed
8:05 – Close: Adjust to the velocity of the tape
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