The 3 USO Charts that matter

OK, Goldman downgrades oil on what appeared to be an African peace initiative that was dismissed immediately by the west as well as the Libyan opposition. I warned that they'd (Wall Street) would still drive the trade lower to shake out traders, but that USO still has a bright future and a couple of days ago, I said, "If you like USO, now's the time to start accumulating your position".

So a couple of lessons, 1) don't believe anything from Wall Street as it's all self-serving. they don't spend hundreds of millions of dollars to give out free advice. 2) When Wall Street is driving the trade lower, which they were as the peace initiative was DOA, watch for them to shakeout traders at an important price level, this can usually be taken as "expect a scary drop, but don't let that scare you". 3) You don't really need to know much about oil beyond the headlines of the middle east falling apart to know that it's going higher.

 The idea was the March highs would be taken out, they were taken out . The trendline which was an important support level is what most retail traders were watching, so that's the obvious Wall Street Shakeout target. Other then what 3C was saying, you can see the candlestick reversal right on the chart.

 Our pullback target was to the blue moving average, the entire time all 3 indications on this chart remained bullish, despite a 6+% drop in 2 days.

And 3C likes this trade, it passes the test.

So in the days and weeks ahead there will be more games, Wall Street probably didn't pickup as big of a position as they'd like to, so I'd guess they'll be more scare tactics, unless the charts which are the literal proof of what is being done despite what is being said, give you a good reason to sell, don't let them scare you out of a good looking trade. They know it's a good looking trade and they want your shares. They took quite a few from nervous traders, but the entire point I've been trying to drive home here at WOWS is that technical analysis (which would tell you it broke down when it broke support) is being used against technicians everyday. Whatever you learned about TA in the past, it's likely more of a liability then helpful, unless you understand that Wall Street is using it against retail traders; with that perspective, Wall Street becomes as predictable as the retail traders they rob every day.