USO

A few days ago I was expecting a slight correction (healthy correction) in USO and some fundamental news came out pushing oil higher (I don't recall what it was at this moment with all the events going on, but I believe it was increased hostilities between the Israelis and Palestinians).

USO is nearing resistance now represented by the March highs, so now is as good of a time as any for a correction to brace for a move through resistance. I'd actually prefer to see that outcome as USO is getting a little over-stretched and maybe a little overbought. It's better to wring out the excesses before they get too excessive.

There are some preliminary readings that suggest that may happen, however, USO has not reacted to much in the Arab world in the short term, until Israel, so if events escalate there, USO may very well make a parabolic move to new highs, at that point, I'd expect a correction to hold near the former March highs.

Note today's daily candle has lost momentum compared to yesterday's as we near the March highs.