USO / ERX Update

Yesterday's posts on USO  and USO/ERX Long both showed the charts and evidence for a move up in USO and more broadly energy. USO is up 1.44% today and ERX +2.53%. Lets take a look and see how the move is progressing for both.

 Light Sweet Crude futures 1 min seem to be in a consolidation or in line with price, all in all this is good for the move in oil.

 The 15 min chart shows the same positive divergence that USO has shown and the reason why I've expected a pop higher, I'm not so sure this is a corrective move.

 At 30 mins the move seems to be capped as it is no better than in line on a downtrend.

USO

 The bullish/bearish candlestick with volume has worked well and it's a concept worth putting in your tool box. At the red arrows we have a bearish reversal candle with high volume, it worked out, at the green arrows we have a bullish reversal candle on high volume and it worked out, the high volume at the yellow arrows is insignificant as there was no bullish/bearish REVERSAL candle there.

 I'm certainly interested what oil can do, the 4 hour and even 60 min charts don't look good for the bigger picture, but I'd rather follow the message of the market for now before just accepting these signals on long term charts, although they are quite impressive.

 USO's near term intraday leading positive divergence yesterday along with the general tone of the market made it look probable that the move up would start today.

 As for initial targets, I'd think at least a higher high in the new downtrend and perhaps even a new high.

ERX

 ERX formed a bullish pennant today, I show signals that suggest it breaks higher, but as I'm writing this, it already broke higher, now up +3.84%.

 ERX 4 hour chart like USO doesn't look good for the big picture.

 Like USO, the leading intraday positive from yesterday made it look like ERX was ready to make its move today.

 This is the positive divergence intraday on the pennant consolidation, but as mentioned, it already broke higher.

Here are the initial likely targets for ERX, again a higher high in the newly forming downtrend or even a new high.

We'll be watching for the next trade in both, I hope you were able to grab some.