XSO may be seen as a leading index during turning points which may not get the attention that it deserves from us technicians. It usually leads the way, then XJO follows suit. This was the case recently. XSO had bottomed out in August 2015 unlike XJO bottoming out in Feb.2016.
I have personally overlooked XSO, I must admit.
What is going on with XSO at present in this weekly time frame ? Dow Theory on test here.
It’s Major Weekly trend is UP. Meaning tide is in a bull run heading North. Very significant development as long as it remains this way. For it’s Major Dow Theory Trend to change, a low, lower than that of 1949.50 is required ( see Red solid horizontal support line).
It’s intermediate and short term trends are Down. In short, both intermediate and short term trends are in a corrective mode (counter cyclical move) as of this writing until proven otherwise.
How far this correction may go ? I wish I knew. But I have marked levels of price support on this weekly chart with Blue horizontal support lines which may be worth watching.
A probable scenario is that XSO is likely to set it’s higher trough (HT of 3rd TF) before the next major up leg.
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