The US Oil Fund ETF (USO) gave back all its gains from earlier this morning, which means the USO declined nearly 7% since its pre-opening up-gap. What this tells us perhaps is that Mid-east hostilities and saber rattling or not, it is unlikely that the crude oil complex will put in a "V" bottom. Instead, today's profile argues that the forces of deflation remain powerful, and that geopolitical events remain a secondary force -- not the primary one. If that proves to be the case, it tells me two things: 1) that we still need to "take trades" in the USO (take profits on significant near-term moves), and 2) that a non-"V" bottom likely will be carved out, which means we should expect a multi-week trading range between 32.00 and 27.50 to form prior to a sustained recovery bull move.



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.