while WTI crude has rallied the past couple months (USO in light red on chart), the ratio of oil service stocks to oil producers ($OSX:$OIX) hasn't done much. I've found the ratio to correlate nicely to crude prices over the years, and so view the ratio's lack of strength as a bearish tell for the oil market moving forward.
I don't feel any obligation to make disclosures on this half-conscious blog, but I will say that I shorted USO on Friday. although I think oil can move substantially lower over the longer term, I'll probably take profits on this particular trade if USO drops to around $35 (low $90s for WTI).
if I am wrong, then hopefully oil will advance in the context of a broader year-end liquidity rally and my long position in SNE will offset. if oil goes up and equities tank, then I'm pretty much fucked.