Saturday, February 7, 2015

USO Oil Chart Analysis

Click on Chart to Enlarge

This chart is an hourly of USO which is showing a MACD indicator in the lower pane.

I have a retracement of the the recent thrust higher on the chart as well as a simple time cycle projecting forward multiples of the time the recent thrust higher took.

A few points of note:
  • The hourly MACD has not yet formed a bearish divergence with price on the rally.  This suggests to me that this rally robust short term move has not topped yet.
  • Since the high earlier in the week, price has traded sideways below the high, suggesting to me that a correction of the initial thrust is occurring.
  • As we move into next week, the time since the recent short term high will be greater than the time of the rally, increasing the possibility that the correction will complete and price will break higher.
I am also showing the b? possibly forming back toward the middle of the recent thrust, creating a more classic abc type look.  That is just an estimate of a typical "flat" type abc move in Elliott wave term, and may be a short term possibility.

Also for those that understand the concepts of overbalancing in price and time, note that the recent thrust off the lows in oil has created a larger move than any rally since the high in June 2014.   So, it appears logically that at least a correction of that decline is underway, if not a major bottom.

I have suggested recently that I think that oil may likely come down to test the lows or make a new low after this rally before bottoming for a longer time.  I still feel from comparisons to past oil bottoms and to the typical weekly MACD divergence present at major lows, that this could occur.  If so, I think next week would likely be the high for this thrust.  But, for now I am just closing tracking this hourly chart so that I can get a better gauge as to when this thrust is running out of steam.


No comments:

Post a Comment