Israel and Oil

Just this morning, Israel was listed here as a flashpoint.

Take a look at oil as Israeli tanks enter Gaza and several civilians are killed

The action in the red box is what short covering looks like, that and computer trade.

There are some negative divergences building in that have taken away some of the momentum.

As you know, as of yesterday we were expecting a normal, run of the mill pullback in USO, nothing that threatened the uptrend. It seems as of now, events will dictate oil for a bit. The question technically is whether the short covering covered the entire position that was set for a pullback?

It's interesting to see how much more aggressively oil reacts when Israel is involved. There are some real fears building that this transition in MENA may have disastrous effects on Israel strategically.