Checking back in on the faint signs of life in oil

Had to check back in on oil, since we addressed in last weekend as possibly firming up for some kind of bounce. While that didn't exactly happen, there continued a deceleration of its movement down, and depending on which index or fund you track it actually edged up slightly. Now Merriman has also identified this time window as the time for a potentially important low, even if it only bounces temporarily and then puts in a more lasting low in a few months. So here's a quick look at the charts. First, the COT (commitments of traders) which shows that the large speculator long positions have finally been coming in, as the commercials have also been pulling back quite a bit on their net short positions. This pattern alone is helpful:


Next, here are three looks at oil using the charts for the WTIC continuous contract for light crude, as well as the USO well-known exchange-traded fund. At the bottom, I've also included another ETF called USL, but only because I saw as some other blogsite that USL is being touted as "better than USO" - I have no basis for any opinion on that one way on the other, however ... and I don't like seeing that the volumes in USL are much lower than USO. I tend to trust an ETF much more when it has higher trading volumes like USO. Certainly, both these ETFs were weaker at the end of the week than the WTIC contract, as you can see in these charts:


But let's not let looking at the tea leaves obscure the obvious - oil has got to start putting in higher highs, with higher lows, to be measured as being in any kind of bounce or rally mode. The chart pattern can be counted as having completed a wave down, and the indicators show that a bounce or rally can start any day now. If watching this during the week, just look for good buying volumes to kick in along with a price movement that rises nicely, at least on the 15-minute and hourly bars, that should start to improve how the daily-bars chart looks.