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After spending the first four days of the week dropping, the United States Oil ETF (USO) saw a bump on Friday. Traders and investors alike were losing their minds. Oil at $100? The narrative is stronger than ever. Yeah, right. This won't last. It can't last.

It's not an accident that it fell to its lowest levels since late March on Thursday. The 19% pop we saw from the OPEC+ production cut announcement a few weeks ago? That's gone. This is merely a head fake. And that means two things:

1. If you've been thinking about making an investment in any oil-related company that'll benefit because of higher prices, you may want to sell out.
2. Prepare for the downside ahead - there's money to be made here.

You see, the world - and price - of oil operates differently from normal businesses. Let's stay topical and look at Tesla (TSLA) as an example. When Elon Musk and company realized that demand for their vehicles was lower than before, they had to take action. 

So, what did they do? What any business that deals with lower demand has to do. It's truly 101-level economics - demand drops, well, lower your prices to find the new optimal level for your business. If you want to stay in business, it's not a choice. 

Well, as I said, things work differently with oil. Let's take a look at the chart for crude oil WTI Futures as an example.

As you can see, right around late March, the price of WTI began to jump. Clearly, the market was starting to feel better about the prospects of oil. So, that has to mean that the future prospects and fundamentals have to back this up, right? Wrong. We need to look at how the price of oil rose in March to understand exactly why, though. 

And herein lies the crux of the issue in taking the price of oil at face value as an indicator of future results. When the demand for oil falls, unlike Tesla or other companies who must drop their prices accordingly, OPEC+ is able to simply decrease supply to respond to demand. Imagine if Elon Musk said, "We're going to make fewer cars to address our demand issue." I'm pretty sure his board of advisors would do a spit-take on the spot. 

The only reason oil is higher today than it was a month ago is because of OPEC. All of the fundamentals are still bearish. We are going into a recession, which is telling you that energy demand is going to continue to fall. 

You can point to China ramping up production all you want as evidence of better times ahead. Well, every other country is headed toward recession - even if China is coming up on better days, they're not immune to the global economy. 

One of the things that massively drives China's growth is the demand for products that they make for the rest of the world. If the rest of the world is buying less, well, that impacts China. 

I'm not fooled by this "positive" action. I know what the cause is. So, now it's time to get into my plan of attack. While people might expect me to direct my attention to Energy Select Sector SPDR Fund (XLE), I'm actually looking at the iShares Core MSCI EAFE IMI Index ETF (XES). 

While the XLE has companies like Exxon and other oil giants that directly benefit from the price of oil, the XES deals with oil services. These are the companies that are putting the straw in the ground. 

Well, the oil services sector has been falling apart. While the XLE has been moving sideways for months, the XES has been declining since February. That's a direct illustration of the fundamentals that I'm seeing. All of the oil-related companies that aren't directly benefiting from OPEC's adjustments are feeling heat on the back of their neck. 

The fact that all of those oil services are dropping tells you that they aren't out there looking for new holes to drill. It tells you that demand is going down.  When you've got a booming oil market that's ready for takeoff, the XES will lead the XLE because it pays them more to go out there and find oil than it does for a consumer to buy it. 

The fact that it is declining tells me all that I need to know about their long-term outlook of the price of oil. So, if I'm looking to short the oil trade, I'm looking at the XES, not the XLE. And of course, we can drill down even further to a more granular level within that ETF. One company I think is poised for more downward action is Baker Hughes Co (BKR). 

This oil-field service company was trading at around $30 on Friday. I'm looking at a four-to-six-week outlook for it to hit $26. The fact that it's been breaking down below its 50-day moving average tells me that it's getting ready for some action. 

I'm also going to be keeping my eyes on TechnipFMC PLC (FTI), Haliburton Co (HAL), and Helmerich & Payne, Inc. (HP). I've got a feeling there's going to be some action on those tickers as well, so we'll want to stay vigilant in monitoring them to make sure we don't miss the opportunities. 

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