Oil's Reaction To The Opec Meeting

At yesterday's OPEC meeting it was decided not to cut output levels which caused crude oil to drop over 2 dollars last night. This morning oil opened lower trading as low as $43.62 for the April contract but managed to close the day higher at $47.35 up $1.10 from Friday's close.

I consider oil's move today to be bullish based on the way it rallied in the face of OPEC's decision not to cut production. If you look at the above chart of USO, you'll notice since the low was made on February 18th that all of the up days have been accompanied by heavy volume. The down days are being made on much lighter volume which in my opinion is another bullish sign that this market wants to go higher.

You'll also notice that USO is once again testing its 50 day moving average. This moving average has contained all rallies since oil topped out last summer. I think if oil can close above it's 50 day average, that will be a very encouraging sign that a bottom has been made and that crude oil wants to move higher.