USO to Gap Down

Last night's post speculated on the probability of a gap down in USO for reasons outlined in the article, "Action/Counteraction" so far in premarket it looks like that's what we'll see.

Here are some USO charts as a pullback was expected around March 4th or 5th, but oil being sensitive to fundamental developments kept running higher.

 3c Hourly, continues to make higher highs, this is very bullish confirmation of the longer term trend in oil/USO

 The 15 min 3C chart shows in red where a pullback was expected, in white, we see where 3C has been playing catch-up but never quite making it.

 The 5 min chart has been ( as it should be) more responsive in catching up and doesn't reflect any distribution so it seems likely that the African Delegation's Road Map to Peace was not expected to be an event that would move the oil market.

 We still have a long signal in USO and here are a couple of potential pullbacks. The 10-day in yellow seems too shallow for a second pullback, maybe the 22 day in blue.

The longterm Trend Channel Stop is even deeper and this would represent a real shakeout which I think is very possible, however, so long as the channel is not breached on the close, USO would still remain within the trend.

We'll watch for the buying opportunity, it should be a decent one.