Oil (NYSE:USO) is trading near the lows of the day following massive technical selling that was triggered at a break of $35.25. The dump has taken the USO down to the master support region between $34.25 – $33.75. This range will have a high probability of a bounce on oil and should be watched for a short term swing. In addition, the high technical volume should be noted as a decent signal that a short term bottom may be in due to what is referred to as capitulation. This is when a stock or market has fallen dramatically in recent days/weeks and when it is near the recent lows, it gets flushed out with huge volume on a massive intra day move lower. This could be what has happened to oil and the USO today.
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