The first thing to understand is USO is an ETF tied directly to crude oil, XLE is the energy sector and there's a difference as the energy sector is much more broad and includes service industries and other forms of energy rather then just crude, so there can be and are differences between them.
Yesterday I was short cruse using DTO, I've sold that position this morning but may re-enter. Crude moves the most over 2 issues, 1) the value of the $USD since almost all crude is traded in US dollars, except a small outpost the Iranians have set up. The second thing that will move crude in an instant and we saw that this week is trouble between Israel and their neighbors. Crude shot up on news this week that Israel sent two more warships to the area of conflict with Egypt. I won't get in to the geopolitics of t all right now, but long term members know what my position is.
Here's USO
USO 30 min looks like there's more downside in USO when looking at the bigger picture as we have a leading negative divergence in place on a 30 min chart.
The 15 min chart is almost in exact confirmation.
The 10 min chart also has a leading negative divergence and is one of the reasons I may re-open my DTO short on USO after this bounce or if this bounce completes.
The 5 min chart which shows more detail, shows recent distribution and current confirmation.
The 1 min chart is starting to show a negative divergence, this could be a consolidation or the start to the end of the bounce. I'm not surprised t has bounced a bit as the sell-off compared to the price of the dollar was a bit extreme.
XLE
XLE has a 15 min leading negative divergence and this is one reason I'm sticking out my short here.
The 10 min chart confirms.
The 5 min chart was in confirmation and then a slight leading divergence on the bounce.
Again, it looks like the bounce will ether consolidate or turn down. I'll update as the 5 min harts develop.
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