USO Update

Yesterday when talking about USO there was one outcome that I regrettably did not mention and that is this.... Stocks, commodities, currencies, anything that trades- corrects, it's good for a move to have corrections along the way. However what I failed to mention are there are two ways to correct, one is what was covered yesterday and that is through price pulling back in USO's case, the second way they correct is through time in patterns such as triangles or rectangles where there's not an emphasis on price pullback, but rather just biding time. That's the other possibility for a correction. In any case, lets take a look at USO now, still the most difficult asset (oil) to analyze in the current situation where Gadhafi who is said by close advisors to likely commit suicide before he leaves the country which has also been speculated. One thing is for sure, the volatile nature of Libya being a tribal nation is quickly closing the noose around his neck as even the military won't carry out orders and he has resorted to African and French speaking caucasian mercenaries to shoot anyone on site who ventures onto the street. It's also likely he'll pull a Saddam and destroy the rest of Libya's oil infrastructure before he goes, which is causing a lot of speculation in oil as Saudi Arabia seems to have need to pick up the slack in europe as it has promised billions of dollars to its citizens not to revolt.  Here are the charts...

 5 min chart, no confirmation and a negative divergence.

10 min chart, the same. Thus far this morning we can't get readings yet beyond 10 min. The 1 min chart isn't offering anything notable.

So looking at the action in oil, we do have the possibility of correcting through time as we are yet to make a new high and are starting to move laterally. I think longer term the path of least resistance is up, but it will be very volatile with news changing day to day and minute to minute. It's a trade that must use a wide stop and focus on the trend.