The ups and down of the oil market are enough to give one a neck ache. Last week's drubbing saw an increase in volatility as 3 months of gains were erased in a couple of days. This week prices are going up and down in 4-5% increments per day. Yet, after all the gyrations, it appears that support levels are holding, and within the context of my crude oil model, this represents a low risk buying opportunity.

Figure 1 is a weekly chart of the US Oil Fund (symbol: USO). The support level I pointed out last week at 38.84 remains the "line in the sand". Just below that for a good measure of support is the rising 40 week moving average at 37.89. It appears that USO is trading around this support level, and despite all the volatility, we find USO is right back where it landed after last week's down draft.

Figure 1. USO/ weekly

I suspect this represents a good low risk entry at least from the stand point that if wrong you will know fairly quickly.