Although the impressive strength in the equities market has been accompanied by equally bullish action in gold and silver, fellow commodity crude oil has essentially been M.I.A. during the recent bullish festivities.

The weakness in the oil patch was particularly telling during Wednesday’s strong showing for U.S. stocks.  Not only did crude fail to participate to the upside, but it sold off throughout the day and closed on its lows.

Was yesterday’s weakness a harbinger of more selling to come?  The chart of the United States Oil Fund (NYSE:USO) seems to suggest as much.  It looks a bit toppy and the 50-day moving average is beginning to roll over.

Source: MachTrader

If you’re looking for some bearish exposure to balance out your other bullish holdings, this is looking like a good time to enter a bear-call spread on the USO.

To review, the bear call spread consists of selling a lower-strike call while buying a higher-strike call in the same expiration month.  It is entered for a net credit which represents the maximum reward available in the trade and will be captured if the stock remains below the lower strike price.  The max risk is limited to the distance between the strikes minus the net credit and will be incurred if the stock rises above the higher strike price.

Since February expiration is under three weeks away, March options will likely be the best play.  Traders could “sell to open” the USO March 39 Call while “buying to open” the USO March 42 Call for a net credit of 62 cents.  In doing so, it doesn’t matter exactly how much you collect for the option you sell or what you pay for the option you buy, as long as you pocket at least 62 cents per share ($62 per contract) on the trade in its entirety.

The max reward is limited to $62 while the max risk is limited to $238 ($42 strike – $39 strike = $3 x 100 = $300 – $62). The call credit spread is poised to profit as long as the USO doesn’t rise above $39 by March expiration.