UCO/USO updates 12/05

UCO: Complete price collapse once the major-c wave completed in October. The moves below the uptrend line and 200d SMA were strong cues the 1.5yr rally had ended. I can count a nice impulse down, with ideally one final v-th wave lower into the support zone between $15-13. From there we should see a nice bounce -likely to retest the falling 200d SMA from below- before the next leg lower sets in.

UCO daily

Big picture wise, I still prefer to view the current decline as primary wave V of Cycle C to new lows. The advance off the 2016 lows was namely IMHO clearly only three waves: corrective. The only alternate view is that the mid-2017 low was a failed Vth wave and now major-1 is in at the October high and major-2 is underway. But for now the charts don’t telegraph this option at all; especially since the decline appears impulsive. Regardless, a small move lower followed by a bigger bounce is for now the preferred path going forward.

UCO weekly

USO: Same count for USO of course, and ideally I would like to see price find support in the green support box, before moving back up to the red resistance zone. The technical indicators, especially the MACD will have to show some good positive divergence to tell us this up move is about to start. For now, I don’t see it yet. ps: please note the almost picture perfect c=1.618x a relationship, measured from the mid-2017 major-low. This is why I see the October high as Primary IV: correction move in three waves (abc). It doesn’t get more classic than that.

USO daily