24% Gone Since My November 11th Warning on Oil! (USO)
Hi friends! Welcome to this update analysis on the US oil market, via the USO ETF! Let's get right to it!
Looking at the daily USO chart, you can see that the USO has been plummeting, since I warned about a potential fall to $10.70 on November 11th. The oil market has been in absolute freefall. You can see that it printed a bear flag (in black) right on top of my $10.70 target, and price has just melted straight through it. However, the USO is about to test major downside support. You can see that there is a rising trendline support level (blue dashes) that is produced from two major lows in the oil market. The first low is the absolute low from early 2016, followed by another major low in mid 2017, and now we are just about to test this rising trendline for a third time today. Since the market is extremely oversold, there is a decent possibility that we could see a bounce, or at least a pause on that level. However, if price smashes straight through it, we could be in for more severe selling.
Just below the rising blue dashed trendline, is a price level that is generated from the pivot low of 2017, at 8.65. So, if the blue trendline is lost, 8.65 would be the next stop. However, if the blue trendline is held, we will probably get a bounce back up to 10.70, to test the former support as new resistance.
On the MACD, you can see that the recent low in momentum corresponded exactly with the low printed when the bear market bottomed out in 2016. Momentum has since made a brief bounce, but is poised to cross over again to the downside. Regardless, price is closing in on the rising blue dashed trendline support. So, we will have to watch how the market reacts to it, to know what will happen going forward. Also for the record, a breakout above the 10.70 level would put a test of the 50 EMA (in orange) on the radar.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Looking at the daily USO chart, you can see that the USO has been plummeting, since I warned about a potential fall to $10.70 on November 11th. The oil market has been in absolute freefall. You can see that it printed a bear flag (in black) right on top of my $10.70 target, and price has just melted straight through it. However, the USO is about to test major downside support. You can see that there is a rising trendline support level (blue dashes) that is produced from two major lows in the oil market. The first low is the absolute low from early 2016, followed by another major low in mid 2017, and now we are just about to test this rising trendline for a third time today. Since the market is extremely oversold, there is a decent possibility that we could see a bounce, or at least a pause on that level. However, if price smashes straight through it, we could be in for more severe selling.
Just below the rising blue dashed trendline, is a price level that is generated from the pivot low of 2017, at 8.65. So, if the blue trendline is lost, 8.65 would be the next stop. However, if the blue trendline is held, we will probably get a bounce back up to 10.70, to test the former support as new resistance.
On the MACD, you can see that the recent low in momentum corresponded exactly with the low printed when the bear market bottomed out in 2016. Momentum has since made a brief bounce, but is poised to cross over again to the downside. Regardless, price is closing in on the rising blue dashed trendline support. So, we will have to watch how the market reacts to it, to know what will happen going forward. Also for the record, a breakout above the 10.70 level would put a test of the 50 EMA (in orange) on the radar.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
Here is the original warning analysis...
