USO Update: A Study in Patience

If you need the longer term charts and the USO set up we have patiently been waiting for as well as our expectations for USO, just let me know and I can direct you to several posts.

There are a lot of lessons in USO: Patience, Let the trade come to you, The right tool for the job, A Bigger base can support a larger move, and more.

USO seems to be coming out of that base we have patiently watched develop and the upside for USO is pretty significant, it's still worth a long position in my view, although I'd prefer some leverage and you have to be careful with volume with leveraged ETFs.

"To make money you have to see what the crowd missed"

A 5-day chart isn't against the rules, often you'll get different perspectives than you're use to making you think more about the position and either building a case or not.

Here we have two bullish reversal hammers and they form a Tweezer Bottom reversal together.

I expect oil is either in a down trend or is range bound in a large/wide chop. Either way, I consider a move up here to be a "Counter-trend rally" and they are often some of the fastest, strongest rallies you'll see.

 Intraday we have a consolidation as the 1 min is negative

The 5 min chart though is in line so all in all, this is a nice start for USO to finally start coming out of the reversal process.

 The 15 min chart and the reversal process.

The larger the foot-print of a base, the more upside it can support.

During the 2000 Tech or Dot Com crash, homebuilders saw at least a year of accumulation, some a year and a half. Who would have ever thought that after the tech revolution changed the entire world (I dare you to leave home without your cellphone) something as historically mundane as "Housing" would lead the next bull market through heavy consumer spending? Someone knew years in advance and the base they created allowed home builders to move +2500% and even +5000%

 If you follow the 60 min divergences you can see EXACTLY what happened here.

60 min Brent Crude futures look similar, same positive and rounding bottom

The 15 min futures are in line like USO's 5 min

This is the actual "Short" stop out on a close just above at $34.27, when that is hit, the character of USO has changed by 2 standard deviations of its normal character and the trend is effectively over and a new one starts, bullish so if you like USO or some derivative asset, I may watch for a pullback of just hold your nose and jump in here with  wider stop and fewer shares, you can always add to a position that is working, in fact as far as I'm concerned you should. Too many people don't because it lowers their trade's average gain which is all ego because it increases your portfolio gain.