Crude Oil Rallies Sharply Today

Lately I've been writing about the same markets over and over (for example crude oil), and the reason for that is because these are the markets that are in play. These are the markets that have the volatility and as traders that's where we need to be.

Today crude oil was up $1.97 for the May contract and $1.62 for the June contract. I want to see the nearby contract up more than the back months because that indicates either increased demand or worries about supply in the near future which is very bullish.

You can see in the above chart the inverse head and shoulders pattern which confirms what I've been anticipating since January which is that January is the seasonal low and that crude oil should continue to trend higher. Notice the objective for the head and shoulders pattern. The objective for USO is 62 which means crude oil can rally quite a bit more.

Yesterday I exited my long position in oil stocks because I felt that they were beginning to look a little tired. Notice I said tired and not bearish. I just figured crude oil was up yesterday and many oil stocks stopped going up. I saw the same thing happen today. Crude was up almost 2 dollars but some oil stocks such as MRO which has been a leader closed down on the day.
The only long position I have left in oil is USO which is the ETF for Crude Oil and that was up over 3% today.