USO Update

USO has had an overall, very bullish bias to it. Yesterday I was concerned whether USO could hold above support being there was very little volume on the break above, it seems as the day progressed it was most likely due to the fact USO was consolidating as you can see in this triangle (consolidations are known for diminishing volume as they mature). You can see this morning's break higher out of the consolidation and pretty much at the exact right time as the triangle came to an apex. 

 It's more difficult to see with a candle stick hart because of the gaps, but using a line chart, you can see a clear inverse head and shoulders bottom in USO, which it has now broken out of. The minimum price pattern implied target for USO is $39.75, I think USO should be able to accomplish that with little trouble. Interestingly, the IEA's strategic petroleum release which has gone up for bid, seems as if it is being bought by the likes of JPM and other investment banks which will store the crude off shore in tankers and bring it in to sell it at a higher price when the time comes, so the move seems to be very poorly thought out. It makes for nice headlines for the average population that doesn't follow events beyond headlines in the paper, but otherwise, other then possibly provoking OPEC in to cutting production, it also seems this crude, meant to lower fuel costs is being used as an investment and will likely have little effect for the average energy consumer.

This 30 min chart (the 60 min looks good too) shows why I have a intermediate term bullish bias on the black gold. This is a very strong 3C chart and reminiscent of the SPY charts as the SPY and broader market were in daily peril of falling even further. This chart also gives some evidence that the H&S bottom which is more difficult to see using candlestick charting, was under accumulation through the entire bottom.