USO/Oil

The drop in oil was anticipated, I posted on 7/22, 7/25 and 7/26 on USO's inability to capitalize on a breakout from a flag and speculated USO would need a pullback before it tried to move higher again, the pullback was on track, the extent of the decline was more then expected, however as I noted then, "We'll watch 3C for signs of accumulation into the pullback". Now, some signs of accumulation are presenting themselves.

 The 15 min 50-bar average has held nearly all of USO's downtrend, on a closing basis it has held the entire trend.

 Another Inverse H&S pattern with positive RSI at the lows of the head.

 USO 30 min 3C showing the signal for the decline as well as a recent positive divergence at the consolidation / Inverse H&S, also in a leading positive divergence.

 The 15 min 3C chart, positive at the lows of the head and currently positive leading.

The 10 min, positive at the lows of the head and currently positive leading status.

 Here's ERX (Energy Bull 3x Leveraged ETF) on a 30 min 3C chart. So between the multiple timeframes and the ETF above, we have pretty good confirmation of a likely move higher in USO.

This is ERY (Energy Bear 3x Leveraged ETF) showing not only the positive divergence sending ERY higher, but as the inverse of ERX above, it is now showing a negative divergence on this 30 min chart, most pronounced at the recent spike highs.

I still expect short term volatility, especially around support/resistance areas, but the big picture seems to be pretty bullish on USO/Energy.