USO: Downtrend Still Technically In Progress
Nothing has changed from my perspective of last week, but I do have additional analysis to provide below my re-post of last week’s analysis:
As I have noted time and again, I refuse to force a count, unless I am left with no choices for anything better. For me, I like to keep it as simple as possible. But, the USO chart has been anything but simple since we bottomed, and I am unwilling to force an impulsive structure into the rally off the lows.
The USO has now dropped down to the .618 retracement of the rally off the February lows. My preference remains that the market provides us a lower low, but the market really does not care about my own preferences. So, allow me to present the potential I see as of the close on Friday.
I have two potentials I am currently tracking. The first is that the market is on its way to lower lows. However, I cannot say that the MACD is supporting that thesis at this point in time. Rather, the divergence in the MACD seems to point towards the market bottoming in a larger degree b-wave. If this were really the heart of some third wave taking us down to lower lows, we should not see such stark divergences on the MACD at this time. That being said, it will take an impulsive move through 10.20 to have me looking higher more aggressively.
But, in the micro count, it does look like the market wants to target the 8.85 region, even in the b-wave structure. So, as long as we remain below the 10.20 region, I am going to expect the 8.85 region to be seen.
As of the close on Friday, I am going to move my resistance up by 15 cents to the 10.35 region. Assuming this rally off the lows is corrective, and continues higher in the upcoming week, then an a=c would target the 10.35 region, if we are able to break out over last week’s high. Through that region, our support becomes 10.05 and the market may have begun a c-wave towards the 14+ region.
However, I can make out an impulsive 5 wave move down off last week’s high, although it did not follow an ideal Fibonacci Pinball structure down. This lack of appropriate structure does make me question it. But, if we are unable to break out over last week’s high, and drop below Friday’s low, it does open the door to the test of the 8.85 region I wanted to see.
To further complicate matters, a higher high over last week’s high, followed by a corrective retracement would even count as a 1-2 structure off the lows, and would also suggest that the c-wave to the 14 region may have begun.
So, unfortunately, I still do not have a clear pattern to which I can point for a high confidence perspective in this complex. But, when one of the patterns noted above does begin to take clearer shape, it should provide more guidance to us to be able to trade this chart with a bit more confidence.