[USO] update

In the backlink I was certainly open to seeing one more wave down to finish off this wave of the oil bear.  Below is the model from that post with the alternate path being down to $9.25.



Monday's action hit the price target but so far it does not look like the wave is complete yet. In fact it looks like wave 3 of [5] of [[5]] completed on Monday and that we should have one more rapid sell off into Tuesday.  In other words, wave 5 is extending.  Should this surprise anyone?  I hope not given how many times I have tried to mentally prepare my readers for this exact occurrence by reminding that Frost and Prechter noted that 5th waves of commodity sell offs like to extend.



Anything at or below $9 in 5 waves down is a very, very likely buy signal.  What would be a serious buy signal would be for an AM gap down followed by an intraday reversal.  If you see this, take that along with the wave count to become very confident that a bottom is LIKELY in place.

Folks, given that we are likely so near a bottom here, a short pep talk is in order, especially for those that just can't bring themselves to use stops effectively.  This has been an historic sell off in oil and other commodities, certainly one for the record books.  We are now at the stage where just about every day some new fool goes on record saying that prices will be 50% lower next month, next quarter, etc.  They point to fake fundamentals which they don't even really understand themselves for if they did they would have been doing a tap dance on each and every financial channel that would have them.  They would have been warning people up and down making a big name for themselves which they could then monetize.

But you never heard of these people on the way down because none of them ever saw this coming.  But Elliott waves saw the likelihood that it would happen.  Now that its here people think oil is going to zero.  I think they are emotional fools.

Do you remember back in June when I modeled that DRD could head down to as low as 80 cents but that after that it was going to be a strong buy with a rapid recovery?   Here is the model from that post.


Here is what actually happened.  Is that just a coincidence?  DRD shareholders were scared to death when the shares went as low as $1.10.  Instead, they should have been buying with both hands because that's when the model said it should bottom.  Use stops?  YES!  But wait until the model says to buy and then buy!



The USO model is now like the DRD model was back then.  Everyone is scared to death even though oil is never going out of style.  There is no reason to be scared as long as you buy when the count says to buy and then stop out religiously if the count fails.  Sooner or later your patience and discipline will pay off big time.  This is about to happen for the likes of ORIG, CLF and others which have gotten beaten into the dust by the oil price crash.  This is not the time to be afraid.  This is the time to be looking for an EW-defined entry point.  Turn off the news.  It is not helping anyone win.  It is just helping everyone herd.