USO Potential Pullback Targets

This is got to be the hardest equity to try to predict right now as news which is not discounted and can not be discounted, unless smart money is getting face time with the likes of Gadhafi who's probably preoccupied with more important things then telling them which rig he plans on bombing next, is so fluid from moment to moment. In the bigger picture though here's how it looked, oil/USO was headed for a correction, then Egypt errupted, Oil did not discount to the upside, a strange event, however there was a reason in my view, smart money knows all too well that the one thing that will drive a market nuts is uncertainty and it will swing way too far. So I believe and as I expressed this, 3C confirmed, that institutional traders were buying oil on the dip, they established a position because they know it's headed higher and they were in the middle of distributing when Egypt broke. That's a big ship to turn and took some time. Now it seems they are in place and oil did exactly what we expected and now my oil trader with options just had his second best trading day in a year (yesterday being the first) on a position only 2 market days old.

It looks like USO will pullback a bit, but that may be halted at any moment on fundamental developments that can't be readily known.

Here are some possible target ares:

 First the daily support zones which fit well with some other indications.

 The yellow 10 bar moving average is an obvious first strike, a deeper correction would be to the blue 22-bar-THIS IS AN HOURLY CHART!

The Trend Chanel will continue to move up on this hourly chart, it works very well and is figured out by the average recent volatility of the equity in question, it's not like an envelope channel or Bollinger Bands, it's much more stock specific. I'd say a pullback with a rising T.C would meet somewhere in the red box which is close to the more important support zone on the daily.

Remember though to watch for news on oil, especially any attacks or supply disruptions, meetings of OPEC or even rumors.