A Hot Oil Coil

Given that crude oil topped out last late-September, suffered a sharp correction, then has gone nowhere for two months running, I have been fairly quiet on the commodity and various oil stocks, for the most part. As we noted with Members, other segments have commodities have been more active, even if they offer the usual head-fakes and traps. 

Now, however, the USO ETF for crude (daily chart, below) is at least flashing a sign of potential, namely in the form of a coiled consolidation. If the economy is resilient enough to keep hanging in there, coupled with global war tensions in various theaters, I have to believe crude can surprise to the upside this year. A simple break and hold over $70 on this ETF would be a good start, as well as seeing pummeled oil stocks like CVX and RIG firm up after brutal corrections in recent months. 

Also note how this setup is presenting itself just as the tech/mega cap euphoria and even outright arrogance from bulls reaches yet another fever pitch--A rotation down to oil and away from the crowded leaders seems appropriate for the looming stagflationary environment the powers that be have created.