For the upmove off of Wednesday's upside pivot reversal (34.07) into Thursday's high (39.82) to be considered bullish, I needed to see the US Oil Fund ETF (USO) weakness hold at or above 38.00, which was the case yesterday afternoon. However, this morning's gap down open and plunge beneath 35.78 has quashed the potentially bullish pattern structure into something considerably less constructive -- and possibly has initiated a new downleg within the still dominant bear trend. At this juncture, I would not be surprised to see the USO attempt to fill the gap between 37.25 and 38.00, but thereafter to resume its decline towards a test of the December low.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.