As swift and ferocious the sell-off in crude oil has been, you can see below on the daily chart of the USO ETF that the neckline of the inverse head and shoulders bottom (light blue lines) from earlier in the summer was not breached. Instead, we saw a pinpoint retest with precision of that breakout point, which is holding given the bounce today. This is an excellent point of reference to observe going forward. Moreover, the notion that crude is in free fall is not quite accurate, given the higher low from the summer and the, admittedly sharp, throwback.

______________________________