Charts of Interest USO

Comments: This is the dilemma: on one hand, the precious metal company shares are negatively diverging from Gold, getting slammed down on any weakness in the precious metal. On the other hand, Gold is strongly positively diverging with respect to the other commodities, like Oil and Copper. What's the best way to play this situation, especially now that Oil appears to be having or is close to having a washout bottom? Check out the chart of USO, the oil derivative, above. Massive volume during the last few days which means a bottom of some sort is near. On the other hand, I think oil will eventually touch $45 so at best only a temporary bounce is in order. One issue with USO is that it seems to be trading at a discount to the actual oil price, probably partly because, unlike GLD, the underlying is only derivative contracts, i.e., paper. So that's a bit of an issue as far as potential investments are concerned. Unfortunately, I'm not really crazy about the XLE or OIH charts either.