Sunday, March 6, 2016

[USO] update

The HT4 threat brought up in the backlink appears to have dissipated.  In order for that threat to be a real concern, USO would have had to break down per the green path below.  So it basically head faked back down in the channel in order to take out stops and then reversed course, thus invalidating that pattern.  This is likely bullish near term.  Besides, oil is not going to let gold run away by itself for very long.

USO has already broken out the weekly chart on the log scale.  Next resistance is at the red circle.  This is obviously still very early so I do not see a full 5 up yet.

I like to see breakouts on both log and linear scales.  As you can see, linear has not committed yet.  This absolutely needs to break out this coming week in order to put in a first confirmation of breakout.

SDRL has not put in 5 up from the bottom yet.  If it does so then we know a powerful rally of some sort has begun and in fact the bottom might be in for oil.  One cannot really don't think it is just going to go worthless like so many foolish idiots are blabbering about on TV these days.  Talk of perpetual gluts and of fracking rapidly un-stacking as soon as prices hit > $40/bbl. is fantasy talk.  These small oil players are seriously impaired and banks will not be loaning the easy money like they did before.  Even if they want to do so I think that the federal reserve is going to force them to play more conservatively going forward.  Yellen doesn't want to be dragged into the streets and killed for the sins of Greenspan and Bernanke.

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