Serious bottom is likely in now with USO

In this post I presented the potential that a 4th wave triangle would break down into wave 5 resulting in new lows in USO (with probably damage to RUSL).   Today we got that breakdown just as it was supposed to except not nearly as deep into wave 5 as it might have been.  The only requirement for the 5th wave which follows a 4th wave HT is that it be 5 waves.  It does not need to go all the way down to the 1- 3 rail although it is possible.  It doesn't even have to put in a lower low.  But it does need 5 waves down.

The buy signal for this pattern is when, after 5 waves down which break the lower rail, the chart comes back up through the lower rail into the channel again.  That is first confirmation.  When the chart breaks up through the top rail again, that is second confirmation. It often attacks the lower rail on wave 1 up but cannot hold it, falling back below on wave 2.  Wave 3 will then often take out both rails in one fell swoop with wave 4 back testing from above.  Wave 4 of larger 1 up will put clear distance.

In the case of USO, after the e of 4 throwover of the top rail, we see 5 clear waves down and then wave 1 broken back into the channel, wave 2 fell back below with an a-b-c, wave 3 took out the lower rail and it took out the top rail of the parallel channel (a very important resistance line) wave 4 of 1 fell back and that is where we are right now.  Odds are high that the top rail will break down this afternoon and then early next week oil (and RUSL) are going to begin thrusting upward in a very aggressive fashion.  RUSL should be forming a 3rd wave at that time so its moves should be powerful.

If we assume that what we have below is all of wave 1 and partially into the retracement for wave 2 then wave 3 should take off in the last hour of trading and take out the top rail with gusto.  I think a major bottom is in for oil as long as USO stays above the lower rail of the HT shown below.