USO Update

Even with the tensions building in Iran as they apparently are getting ready for training exercises to shut down the Strait of Hormuz, obviously letting and would be attackers know that they would try to send oil sky-rocketing if attacked (or, perhaps if they continue to be attacked as the 2 bases destroyed in 2 weeks don't seem like a coincidence). While they could shut down their oil production (although it wouldn't be helpful for Iran), shutting down the strait may be a bit more challenging with a US Aircraft carrier battle group in the region. It will be interesting to see Stratfor's updated naval map and see if more assets are being deployed to the area. In any case, even with that news, oil is down today on a stronger dollar.

 Technically we are not out of the woods yet, USO dropped nearly 2% today, but did find support at the end of last week's lows. I'd feel better about the prospects with a break below $36.50 or so.

 Here's the hourly chart, not much has changed and remains negative.

 The 1 min chart shows a little intraday bounce-remember though this market has been nuts about filling gaps and as I mentioned earlier, when that behavior stops, we will have break away gaps which will be very bearish., we'll see if the implications of the negative divergence on today's 1 min chart play out and lead USO lower, I'd like to see support broken.

The 2 min chart has me a bit perplexed, it looks stronger then I like, however it may just be an anomaly, but it needs to be carefully watched for any changes in character.

I'll update USO as conditions warrant.