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USO Crude Oil ETF Gives Back Gains

Commodities / Crude Oil Dec 29, 2008 - 03:06 PM

Forces of Deflation Remain Strong as Oil Gives Back Gains - Wow, the US Oil Fund ETF (NYSE: 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.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

© 2002-2008 MPTrader.com, an AdviceTrade publication. All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.

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Comments

clay
31 Dec 08, 08:26

crude oil

I covered my dxo short (2.50) at 1.98 and reversed went long. Dropped next day to 1.78 (gulp), but closed up at 2.05. Covered short yesterday at 2.32 (high 2.38) and trying a short scalp today, if it breaks yesterdays low, I will stay short.

I have a project for you. I have DTO; DXO ERY; ERX on my monitor. DTO very thinly traded will go the opposite way or lead the next turn in trend. Check this out a five minute graph. yesterday DTO was strong +$6 but the Bulls were soft until the last hour of trading, DTO travled down, but still closed +positive while the Bull etfs closed near their highs. I have been using DTO as a clue to reverse my position. Check it out. Looks like the War isnt going to do it, until Israel bombs Iran. Israel is looking for any provoocation and this Hamas thing may be the start with the USA saying Do It.. Why not .. we already have hour troops there in Iraq.

Clay

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