[ORIG] update

In the backlink we had a falling wedge with throw under that was a good candidate for the bottom.



Before updating the picture above I want to show the bigger picture which is that ORIG is right up against the top rail of its larger falling wedge.  A breakout at the red arrow would be the first indication that the trip back up to the $9-$10 range has begun.



The oil markets are very scared right now because they have sort of lost their mind about what is real and what is not.  Without oil, the world stops turning.  That is the reality of it.  All oil gluts are always resolved rather quickly and no it won't be different this time.  This wild volatility in asset prices is a result of a rubber band money supply where easy money creates overproduction as everyone gets into the act on debt.  Then the shakeout phase arrives which is where we are now.  Soon a logical reason will come along why this is unsustainable.  They'll act like it is new news of some sort and the news will sound credible because they have to save face for overreacting to the downside.  But the human frailty of extrapolating current conditions forever into the future is very hard to avoid and they have fallen into the trap of doing it. 

Even in the face of astounding earnings they keep the pressure on Ocean Rig when crude falls a bit more.  Earnings have already shown that ORIG has a year of decoupling built into its business.  No matter.  USO is very near the bottom of 5 down and when it bottoms in the $10 range it is going to double to $20 since that is the level of the prior 4th.  What do the shorts on ORIG think that will do to these shares?  The chart is already telling us that it will likely be smooth sailing all the way to the $9 range and that is the target if the longer term bearish EWI model is true.

If this goes south of $1.10 I am going to triple down on this one.  I'd love to see that happen with a unicorn tail type move that takes out all the stops one last time before taking off.  I would not be short this stock but the shares are currently 20% shorted.  I don't think that will end well for them.