USO forming a bearish pennant

This is a chart of USO showing a possible bearish pennant that has developed over the last month.  An alternative view would be to consider it a bearish flag, by drawing the upper edge of the pennant parallel to the lower edge. Considering it a flag, however, does not change its inclination (bearish) nor the length of the flagpole.

The blue long-term up trendline indicates that USO is currently in a long-term uptrend. The early May breakaway gap down, which flew down past support at 42.25 on very high volume, marked the end of the steep mid-term uptrend, denoted by the green up trendline.

The early May breakaway gap may also have been the right side of an island reversal pattern. The left side of it could be the late March or mid-April gap up on low volume, which could be considered the exhaustion gap of the rally that ended in early May.

At this point, a break below the long-term support line could find some support just below 38, but after that it's free fall to 35.25 or 34.50.  The length of the flagpole, however, would take the next leg down to 32.50.