USO headed for $70

I last posted about Oil here. Clearly, I underestimated the ferocity of this decline. Now, with Oil under $100/barrel, I think we could see it hit $85-90 (USO is roughly .8 * Crude) before it starts a significant rally. That equates to USO dropping to about $70 or so.

Notice the 5-waves rally that is now being corrected. There are three layers of strong support in the USO $70 range that I think should hold as good support for a bounce:

• $71.82: 61.8% retracement of the rally from $42.56-->$119.17
• $69.20: Wave-C = Wave-A
• $68.57: Wave4 low
• $68.00: long-term trendline support
• ==========================
• $69.39: average