Based on my near-term technical work, the fact that the US Oil Fund (AMEX: USO) broke out (above 44.60) and spiked to 45.51 – and then gave it all back – represents the conclusion of the first upleg of a larger, unfolding recovery rally period – and NOT the start of a new downleg.  If my work proves correct, then the USO should hold at or above 44 and then embark on a secondary recovery upleg that tests key resistance at 46.00/20.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.