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By Mike Paulenoff, www.MPTrader.com
Wow, the US Oil Fund ETF (NYSE: USO) gave back all its gains from earlier this morning, which means the USO declined nearly 7% since its pre-opening up-gap. What this tells us (perhaps) is that Mid-East hostilities and saber rattling or not, it is unlikely that the crude oil complex will put in a "V" bottom. Instead, today's profile argues that the forces of deflation remain powerful, and that geopolitical events remain a secondary force -- not the primary one. If that proves to be the case, it tells me two things: 1) that we still need to "take trades" in the USO (take profits on significant near-term moves), and 2) that a non-"V" bottom likely will be carved out, which means we should expect a multi-week trading range between 32.00 and 27.50 to form prior to a sustained recovery bull move.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
