USO Update

Egypt! Whatever smart money's intensions were before Egypt, it doesn't take a rocket scientist to figure out that turmoil in the middle east can lead to higher oil. I said in many of my recent past analysis on USO that institutional money isn't going to let this run without them establishing a position there (phase 1-accumulation of the accumulation/distribution cycle) and Egypt isn't going away. Look how long it took for protests to bring down the Shah of Iran.

Here's a USO update.

 The 100-day simple moving average is tracking USO pretty well, an easy way to tell is to look at how it gapped up through the 100 (resistance) back in November on some volume and then it's acted as support since and look at the recent volume at support! MACD hasn't yet made a deeper low and looks as if it may not. In my mind institutional money had 1 idea before Egypt and another after and there's been a change in their plan and that' what we are witnessing.

 15 min chart-we do have a triangle-in commodities they seem to be less manipulated, but still, I wouldn't be deterred from a long if the triangle broke down momentarily.  Volume is right for the triangle-it just "appears" it's not a continuation pattern.


And here's the 15 min positive divergences at support. Pretty strong looking in my opinion-recall that huge daily volume, the accumulation process might have been sped up in light of how fast political events may unfold.