An Ending Diagonal in Crude Oil

I must be crazy for continually suggesting that we are near a top in crude oil given the number of analysts predicting $200 oil. However, the charts still look bearish. I last posted about crude here. Since then, price has formed a marginal new high, but I still think we could see a decline to $100 or so on USO.

The daily chart for USO is above. Notice that Wave-v of Wave5 is an ending diagonal that subdivides into 5 overlapping waves. This is a very bearish exhaustion pattern that swiftly retraces its entire length once the lower trendline is breached. The clear MACD divergence points to lower prices as well.

I also noticed that while USO is making new highs, OIH and XLE are dropping. The 50-day correlation between USO and OIH/XLE has been above .7 for months, but in recent weeks, it has dropped significantly. The rubber band is being stretched, and either OIH/XLE will snap up, or USO will snap down. I favor the latter based on the chart patterns.

I would suggest that as long as USO stays below 125 or so (the final wave in an ending diagonal can spike above upper trendline before reversing sharply), we will see a sharp decline. If I were to trade this, I would go short if price closed below the lower trendline. My stop would be above the preceding high and my target would be 100 or lower.