Pause Before Next Upmove for Oil
If a new, powerful upleg in the US Oil Fund ETF (NYSE: USO) started at the 9/25 low at 33.45, the pattern carved out since exhibits a structure that is incomplete to the upside. Although the major upside thrust occurred into the Oct 21 high at 41.92, the 9-trading session pullback into Tuesday’s pivot low at 39.13 represents the conclusion of a correction within the larger incomplete upleg that projects to 43.00-44.00 in the upcoming hours/days. The rally from Tuesday’s low at 39.13 to yesterday’s high at 41.44 concluded the initial upmove of a new upleg, while all of the action since yesterday’s high is acting like a high-level congestion area prior to another burst of strength that hurdles the Oct 21 high at 41.92. If prices break down for any reason, key buy window support resides at 40.30/00, with the critical exit-long support plateau at 39.10.