USO Update

Thus far USO has done everything we either expected or wanted to see, so much so it's to the point that it's a little scary.

For instance, looking at the USO chart (daily)...

This daily chart shows all of the calls for USO this week.

Last Tuesday morning, 2/3 which is the highest intraday high on the triangle that led to a consolidation/pullback, USO Update:

"Oil is now on track for its 4th consecutive daily gain and it appears, as usual, the bottom callers are in, just in time for what should be a little consolidation which will likely kick them out of the trade and turn them bearish again just as USO makes another leg higher."

Monday at noon, , the 3rd bar to the right (Doji star), USO Update:

"Note the shape the consolidation is taking on, a bullish ascending triangle, which would be the right consolidation pattern for continued upside, however if technical traders are picking up on this too, look for a head fake move below the triangle, this would be a high probability / low risk entry in USO long for the next leg, but as with any pullback we'd want to confirm the accumulation of a head fake move.

If we saw a head fake move and I'm suspecting it more and more as this ascending triangle becomes more evident, than it should look something like this and the highest probability / lowest risk long entry would be in the head fake move's area.

The white arrow is the expected path from a technical analysis point of view, a breakout to the upside as the apex of the triangle closes, the yellow arrows would be the higher probability head fake, below the triangle where any stops would be placed and turn traders bearish on USO, followed by the accumulation of lower prices and an upside breakout"

The head fake move occurred yesterday and despite the EIA missing and by all rights oil should have moved much lower, this is yesterday's USO charts:

"

 The Daily USO chart and it's pullback not only toward our target area of the two moving averages, but the break below the triangle forecasted yesterday.

Ideally tomorrow's closing candle would be a Doji star or bullish hammer on increasing volume, ideally..."

And today's consolidation area...

Right along the very moving averages we expected it to pullback to days ago, exactly and furthermore, thus far the Doji/Star which looks like it will close on higher volume, EXACTLY what we were looking for.

As for the USO and CL charts, we want to see accumulation in to a pullback/consolidation, especially a head fake move (below the bullish ascending triangle)...

 USO 2 min leading positive at the pullback

USO 3 min leading positive at the pullback.

/CL 1 min positive at the EIA lows this morning.

/CL 5 min positive

/CL 7 min positive

/CL 10 min positive and we can keep going. The highest probability and why I think USO has barely scratched the surface of what it can do...

/CL 4 hour positive chart.

I can't really ask for a much better set up for USO long than this, I'd prefer to wait toward the close and make sure we have a bullish Star, Doji star, hammer or some other bullish candlestick on the daily chart and increased volume over yesterday's which looks probable now.