I found the action in both gold and oil pretty interesting today and thought I would share the charts with you readers. Let's start with GLD first.
GLD has seen a pullback in the past few days. In fact, it closed below the MA(50) today on more than usual volume. Notice the negative MACD divergence that preceded this pullback in gold. Along with the MA(50), 110 remains the important level for GLD here.
Let's move on to USO now. Notice anything similar? Yes! The same negative MACD divergence that we observed in GLD is developing in USO. In fact, it is a stronger divergence compared to the one seen earlier. This, coupled with the fact that we had a weak close in USO today where it failed to hang on to the 40 mark, makes me like the odds of a pullback in oil here. 40.5 remains the important level for USO as it corresponds to a gap which remains unfilled from early January. In fact, we topped right at this gap today.
Bottom line - I would think twice before going long oil here and look to lock in some profits if I was already long.
Take care and good luck tomorrow.