[USO] model update

Before I start, I want to compare USO side by side with PBR because while the charts look similar there is an important difference.  USO is on the left, PBR on the right.  This is what I mean by bullish divergence.  The underlying commodity has tanked to a significantly new lower low but the corporation has not.  Keep in mind that I already counted PBR 5 waves down into C so I really do not expect a lower low on it here.

This simply means two things:

1. We are most likely reaching a major reversal point
2. When the commodity stops getting pounded, the company is going to skyrocket because it will be moving into wave 3 up.  For the same reason that I bought puts on LUV, this is about as good a time as you will ever get to buy calls on PBR as long as it does not go to a lower low.  I suspect that the turn comes into the end of the month.

Also note: airlines have been doing well due to low fuel prices.  I modeled LUV as entering into a 3rd wave down.  Because I am modeling oil to be very near an important turn I expect rising fuel prices to be part of the reason for airlines to crash.
 
I don't yet see the USO model from the backlink as having fundamentally changed from the current snapshot even though it was down a bit more today as the DJIA crashed more than 500 points into the close.

Folks, the fed is in a bad way.  It says it would like to raise rates but as we approach the time where that could happen, the market is in panic mode as evidenced by the close of the DJIA down more than 500 pts in a single day.  There is no way the fed can raise the rates without getting blamed for a big stock market crash.  That is not to say the fed won't raise the rates.   When TNX begins to climb without the fed's permission then the fed will have to make a choice: stand pat with the fed funds rate and have everyone know that the fed has lost control of the bond market OR follow the bond market rate with fed hikes and watch the stock market crash.

If the fed refuses to raise the rates then I think commodities are going to reverse upwards because the magick will then be in great danger of being lost.  Once people lose confidence in the fed, the dollar will come under attack.  It would not surprise me at all to see the government throw Yellen, who I have often referred to as the disposable fed, straight under the bus.  When's the last time a fed chair has been fired?  I don't know fed history that well but my first inclination would be to say "never".  Hmm.  Maybe it will be different this time.

In any case, oil is trading now at $40 per bbl.  Because of the decline, even smart analysts like Gary Shilling are starting to say ridiculous things like oil will go to $10 a bbl.  Why not $5?  Why not just free oil for everyone?  Hell, when will the begin to pay us to take the black sticky goo away?  After all, it's free to drill and transport and refine, right?  Statements like those coming from Shilling give me cause to believe that we are closing in on a bottom here.

In any case, if we get a 3 wave bounce into black 4 I'll have to call it a sucker's bounce and then I will be looking to load up on oil related stuff (like PBR) in the $12-$12.50 range of USO.