Our Stock Chart of the day is the US Oil Fund (USO) and we are going to review the stock charts using our multi period contrarian trading style. We believe that the crude oil is in a secular bear market. The bear market in crude oil is set to continue as we have now broken key technical support levels. The weekly RSI, Williams % R and Stochastics have been flashing sell signals since mid February 2017. It was only this week on a surge in the US Dollar that the price of oil collapsed bringing the US Oil Fund along with is. I will also caution that the high yield debt market is also rolling over as they are highly exposed to the US and Canadian fracking industry. As the price of oil goes lower the frackers will see rising defaults thus putting a strain on high yield or “junk bonds”. This breakdown in the high yield debt market will also put a lot of pressure on the US and Canadian stock markets as we saw back in early 2016.
Video Length – 00:08:10
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