May 31

Wild Range in Oil

A wild $1 range today in the US Oil Trust (AMEX: USO). At one point this morning, after the DOE data were released, the USO plunged to a new reaction low at 47.59, breaking the 5/29 low by $0.04. But there was no downside follow-through, and instead of additional weakness the USO has reversed with some power and climbed to the 48.55 area -- leaving behind a potential intraweek double-bottom. Further strength above 48.80 will indicate that a near-term low has been established, which should trigger upside acceleration toward 50.00 thereafter.
Chart

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!