[isatrader]

I'm wondering if an oil producer might be a good next position given that I'm 40-50% positioned on gold & silver miners. However, I'm wondering about caution as the MA for oil is still falling.

US Oil ($WTIC) is making a new attempt at forming a Stage 1 base, and has recently moved into Stage 1A. But as you can see from the attached weekly chart, there's still a fair bit of overhead resistance to work through.

       

There's going to be some very big movers in this sector, as the Stage 4 decline was so large for a lot of oil stocks, but it's Stage is not as advanced as the gold sector, as gold stocks are in early Stage 2, whereas oils stocks are in Stage 4B-/1A in general - see attached VDE chart which is in Stage 1A.

   

One method that I find useful personally is to run the relative performance of the two sectors. So in this case I've used VDE for oil stocks and GDX for gold stocks, and used a 2% P&F chart for a decent view. As you can see VDE is underperforming GDX since the start of the year, and the ratio is consolidating in Stage 4 currently, but could be forming a bottom. So a breakout above the downtrend line in the ratio chart would signal it's time to give more weighting to oil stocks over gold stocks. But it's not there yet according to the ratio chart, but it is very close to it, and so is certainly a possibility. But a trend can last a long time. So until it's broken the relative performance still favours the gold stocks currently imo.