Even though, I have posted on the pitfalls of using USO and advocated using the less risky USL for crude oil trades, I will continue to do technical analysis on USO because the ETF is better known and much more heavily traded.
USO has made some very encouraging signs on the 6-month chart. The 50 day MA is starting to flatten out finally and USO finally appears to have at least a chance at breaking the well watched indicator. Moreover, the past month's uptrend has been measured with any large run-ups met with consolidation.
The bottoming process of any security takes time, and 'The Bottom' will not be known until well after the fact. If USO does not breach the 52-week low over the next month or two, then I will take it as a sign of optimism.
China will lead the world out of the recession and their vociferous appetite for oil and other raw materials will help create some floor for the prices of oil, copper, and the like. There are encouraging signs from the Baltic Dry Index, copper prices, and of course oil prices. Wait and see..
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