Apart from the intense volatility in the US Oil Fund ETF (AMEX: USO) lately, let's notice that purely from a pattern perspective since the low of 90.04 on August 15 subsequent bouts of weakness have created a series of "higher lows," today's low of 91.83 included. Right now, from a strict near-term technical perspective, as long as the prior pullback low of 90.96 (8/20) remains intact, my work argues that the USO is establishing a near-term bottom. A violation of 90.96 will compromise the pattern within the bottoming formation, and likely will trigger weakness that presses prices to test 90.00. Conversely, to the extent that the series of higher lows remains intact, the USO needs to hurdle 93.70 to trigger upside follow-through that revisits 97.50-98.50 near-term resistance.
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