Quick USO Update

All things considered between storage room running out, Saudi output up to 10 mn barrels a day and no plans to cut production unless non-OPEC countries cut production, it's pretty impressive USO is up at all.

However, despite all of that, longer term I think we are still on track.

When the USO base became so large that it was obvious it was too large for a simple counter trend rally, we started thinking bigger, but that meant a bigger base would be needed for a primary trend reversal to the upside so we were looking for not only a pullback to form a "W" or double bottom base, but...

 I expected the most common head fake of a double bottom or double top, the break below support or above resistance respectively which tells technical traders that the base/top pattern is invalidated, but that's how they set the bull/bear traps as technical traders have been playing from the same chart patterns playbook for nearly a century. What technical traders will do and how they'll react to a head fake move that goes against everything in their textbooks, is so predictable, it's easy money, it's an easy set up, in this case it's easy to pick up a bunch of shares form bottom callers on the cheap as they are stopped out and many reverse positions to shorts selling more (the supply/demand dynamic lowers price even more) which is just scooped up on the cheap and in size and when they are ready to move USO back up, all they have to do is cross back above former support or in a double top below former resistance and hit the stops of the newly established longs, starting the move with a short squeeze and nice momentum. . Technical traders are so predictable, they do all the work and heavy lifting and at the end of the day are left holding the bag whether on a daily chart or intraday or in a primary trend market. Just give it enough time and you'll see it over and over again.

 This 15 min chart shows the first base area which grew too large and never put in a sharp counter trend rally and then started going negative in which we suspected a wider double base or bottom that could support a primary trend change, but we also forecast before the move down even started, that there would be a head fake break below support because the concept is just that strong and happens that often and that's what we have in yellow with a positive divegrence.

I don't think this little area of the head fake reversal is done putting itself together yet.
In fact as a dollar denominated asset like Gold, it shows the same positive divegrence right before the F_O_M_C and a sharp, fast reversal to the negative.

So I suspect USO has a little more work to do, which is still potentially an amazing entry.

I just think it's not ready yet, whether it's related to the F_O_M_C and gold or just hasn't finished up with the head fake which is a mini base in itself and as you can see, it could use a second low or 'w' bottom.