UCO, USO, XLE updates 07/21

UCO: I provide a big picture chart here for UCO and then a detailed chart (daily time-frame) under USO. Since both are pretty similar it will cover the long term and short term aspects with only 2 charts. I prefer to count oil, and it’s related ETFs in (blue) primary V of  a (purple) Cycle-C wave. The current price action counts best as an ending diagonal triangle (EDT) down. The chart below is on a log scale, hence the EDT trendlines are parallel; but what it also shows is that as long as price is in this channel the trend is down. Simple. The 20w SMA is pointing down, price is below it and the TIs are starting to turn back down as well. This suggest the next (and last?) leg down looks about ready to commence. The daily chart under the USO update shows the details.



USO: The daily chart of this EFT (and counts the same for UCO as both are so very related: 1x and 2x ETFs; respectively) is on a regular scale and shows the EDT therefore better. Price is now IMHO in (black) major-d of Primary V. Since it’s an EDT we can expect at least 1 more wave down: major-e. At this point it is unclear if major-d has completed yet. Ideally I’d like to see it move to the two upper red trend lines, but beggars can’t be choosers and so far there’s been already 3 waves up off the major-c low, which satisfies the d-wave. But again, normally, price will tag the upper trendlines before reversing. At this point it’s simple unclear to me what price will do shorter term. Longer term it will go further down IMHO to satisfy all of Primary V.

USO daily


XLE: Should now be in (blue) Primary-C of Purple Cycle-C. Alternative is that Cycle-C already bottomed early 2016, but given where oil is -based on the UCO, USO analysis, I’d say it’s more likely price will go lower. We may get a double bottom -at the Primary A level- and not an extension. But it;s too early to tell if that will happen or not, so what we can say now is that price is in a down trend and that’s all there is to it. Note that primary-A can also be counted as 5-wave down: with (yellow) major-a and b as major-1,2 and (red) intermediate-a, b as major-3,4. This count thus tells us that we need another C-wave down to complete a 5-3-x correction, with x being either 3 or 5 waves. This count confirms my general POV to expect lower prices going forward.