Oil has now replaced the U.S. Dollar Index as the driving force behind every market move. In the past, when the U.S. Dollar Index sold off or declined the major stock market indexes would inflate and trade higher. These days since the Middle East is in turmoil it is higher oil prices that have caused the stock markets to deflate and decline. When oil pulls back or declines now the major stock market indexes rally and trade higher.
Today the popular United States Oil Fund (NYSE:USO) is trading higher by 0.33 cents to $40.16 a share. The USO is getting a bit stretched on the daily chart, however, that does not mean it cannot trade higher. Normally, a pullback or consolidation would be in order from the current pattern on the charts. There just may be too much uncertainty in the Middle East to see a meaningful pullback at this time. The USO will have intra-day support around the $39.70 area and more around the $39.25 level. Please remember oil is very sensitive to geopolitical events.