Oil has found its share of traders trying to find what we all know will one day be an epic bounce in one of the greatest sell-offs in a commodity yet this century.
Oil, and USO in particular has recently finished a most impressive head and shoulders pattern. In fact you didn’t hear a lot of people discuss it, instead, just focusing on the fact that oil happens to be going down but not as to the “why”.
Then on the volume front, you have four days of very, very strong volume that nearly every time has led to a very solid bounce lasting at least two days and often times more.
And all of that comes on the heals of some very heavy oversold readings on the stochastics, that if history repeats itself again, could easily trade 10% higher in the coming days.
Listen, I am not calling for the mother of all bottoms here. Instead, I am just looking for some temporary relief for the commodity in what has been a most epic of sell-off.
So here is my thoughts on oil and what it could be telling us about the days that lie before us. I am long on USO from $11.56.
Here is the USO chart:
