The US Oil Trust ETF (USO) has plunged over 6% from its early morning rally peak, which is not a surprise from a volatility perspective, but it is a surprise to me if I thought that a more bullish pattern was under development. In other words, the plunge in the USO has taken back too much of its prior rally to be considered the start of a new bull move. The entire upmove from the December 5 low at 33.08 to this morning's high at 40.73 likely completed the initial rally phase of an intermediate-term period of oil price recovery. If my work proves correct, then somewhere in the vicinity of 36.90-37.10 the USO should stabilize and pivot to the upside for another loop up towards 42.00-43.00.



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.