Oil has completed a 5-wave move on 25 Oct. Oscillators and geometry suggest a decline.
Geometry: Price got rejected at the lower boundary of the channel. The red trend line is a second resistance, connecting the previous low and the gap.
Elliott: We can count an ABC (in green), which makes up corrective wave (b), in blue. If correct, we can expect a wave C to the downside.
Oscillators: The RSI shows a strong bearish divergence. The MFI points downwards. Stochastic is overbought and due to retrace.
Correlation: USO is -.74 inversely correlated with TLT, at support, and .71 with XLE, at resistance.
How to trade it: The idea is to build short exposure between 57 and 60. The red and blue trend lines give us two excellent risk-reward ratios. If price continues towards 60 it is likely to form an expanding flat correction. The idea is invalidated if USO establishes support above 56.