[USO] update - critical juncture (lunch time update)

USO gapped up at the open today thus indicating that the blue path was likely being taken per the backlink.  There are still several ways to count this and no confirmation of direction yet and the chart does allow for one more wave down as indicated in the backlink (although I do see how a falling wedge completion could be the case).

As always, I'll drive for show but putt for dough.  Unless and until USO can break out of that green horizontal, the trend is still down!  Will it break out?  Yes, I think so.  But I really would like to see it have been smashed through and instead it looks to be tip toeing up to it.

In the name of risk management I thus cashed in my recent ARP purchase for a 19% gain on the day.  If this breaks out then I will get back in.  Or if this closes the day today with a nice pullback that looks like a 2nd wave then again I will venture back in at the close and then hope for a gap up above that resistance line on Monday.  But if things turn down rapidly in one final capitulation then I will have a nice cache of powder that is high and dry in order to take advantage of it.

The main take away from this post, however, is why we need to care about that lime green line.  The answer is that if the current upward wave breaks out of it then we cannot be working on 4 of 5 of 5.  In that case we must be starting a significant bounce.  But if that line holds as resistance then it is just a back test from below which leaves us open to one final swoon.  It is the market's job to be as tricky as possible near bottoms so that as few as possible catch the fat percentages associated with being there at the right time.  Manage your risk carefully until we get break out confirmation of that green line.

By the way, DSX which I bought  for 2.11 just recently actually dipped hard into the open today and is now up 9%,  That AM reversal is a strong bullish sign as I have mentioned many times in these pages in the past.  I think the dry bulkers, who are literally in a great depression along with oil services, are about to catch a serious bid.