USO Did as Expected

USO's story has been a little strange this week, but despite the "reasons" why USO is said to have acted the way it has, thus far 3C has been right on it. Last night I expected a pullback in USO today from the signals, however I also showed you some longer term signals that are still healthy and therefore I don't think USO/Oil is done on the upside, still holding ERX (Energy) and there may very well be a chance to pick up USO for at least a decent bounce move today.

 USO started accumulating Wednesday, it was knocked down in price if you recall on middle east news (the Syrian/Turkish skirmish/Iran inflation) at least that was the reason given, however earlier that day I had already mentioned USO would need to consolidate longer to get enough underlying support to make a move, accumulation continued at lower prices Wednesday and by yesterday USO had taken back all of Wednesday's decline/gap down to close near Tuesday's close. Yesterday there was negative divergences in USO as you can see and last night I suspected it would pullback, but a pullback and decline are two different things, I still think this is more likely a pullback which means we may be able to pick up some positions at a lower cost basis and risk for a continued move higher.

 USO from in line on the move up yesterday to a negative divergence on a 3 min chart.

 The more important 5 mi shows the positive divergence at the lows in USO and is in line with price.

The more important 10 and 15 min charts have a leading positive component to them and haven't seen any deterioration from the shorter timeframes, this is why I think USO can move higher.

I'd like to see the short term charts look more constructive, indicating some accumulation of the pullback, then I'd consider a USO long.