USO

Quote from ccwells:


The next couple of days will be critical for the understanding of which way USO is heading. As I mentioned above, the 12/22/09 low is the critical level to watch. A break below that level should usher in lower prices.
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i am not buying all that technical "art", but agree the next few days to weeks are critical because uso is once again sitting at $40. That has proven to be the most important level in the last 6 months.

It will probably hug $40 for a bit especially considering the holiday month, then make a break.
 
Newguy and other fundamental followers:

I know many people who just follow pricing of stocks or ETFs or commodities, and remember ranges, cycle of movements and other things.

Essentially, that is simply watching the charts by drawing it in your head.

By you saying that it does 'this and that' when it gets to $40, you are doing the support-resistance model of a chart, which is what a Technical Analyst does.

Call it whatever, but that is the name that the world gave it, and you are doing it.

Nothing wrong in doing it (or any name you give it), till you make money off of it. That is all these strategies and techniques do for us.

Kenny
 
USO and other ETFs related to oil such as, OIH, UCO, and UGA, all had bearish Japanese Candlestick patterns today. There were either engulfing or Dark Cloud Covers. Long positions need to be cautious here.
 
Since my focus is on ETFs, I will use USO and others to present my analysis. First thing is that I use Fibonacci numbers as my EMAs. I use the 13, 55, and 233 EMA in my analysis. With that said, viewing the weekly chart the price has failed to breakout above the 55 EMA, again. What makes this more ominous is the fact that there was a Japanese Candlestick Evening Star and Tweezers Top (double top) patterns the last two weeks. UGA (gasoline) had an Evening Star and a Bearish Engulfment candlestick patterns.

I use Elliott Wave in my analysis and the price action for USO from the 2/09 lows has been overlapping. This overlapping price action is corrective in nature and indicates that another impulse wave down is coming sometime in the future. I believe it will be in the near future.

Now looking at the daily chart, the past week has shown a Bearish Harmai and Bearish Engulfment Candlestick patterns. The price gapped down through the 233 EMA from those reversal patterns and fell hard all last week. Near term, the price is oversold and we could see a pause before continuing the decline.

On a daily chart, OIH has painted a 2B top, Dark Cloud Cover Candlestick, and Bearish Engulfment Candlestick this past week. UGA painted a 2B top, Dark Cloud Cover, and two gaps down with a very hard fall from the top.

To me, the evidence is too bearish for considering higher prices for the Oil and Gas complex. The price is oversold, but there is no reason it could not stay that way for a little longer. There could be an attempt to fill one of the mentioned gaps. The 1/11/10 high is the critical resistance that must hold if prices are to move lower as I anticipate. My downside targets for USO are 37.00, 36.00 and 34.50.
 
It is hard to see where we are in the Elliott Wave count with the decline being so severe. I do believe that a near term bottom is nowhere near at this time. The way the price action has been the last couple of days, the best thing to do is hang on if you have taken action on my recommendation.

From what I can tell, the initial wave three down is not even complete. The third wave has been extending with gaps along the way. I will start being a little more cautious about exiting when we get to a near complete five waves down.

The near term support levels are 35.14 and 34.70. I may consider taking profits at the first level. It should be a little clearer with a couple more days of trading.
 
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