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Lack of harmony. Watch the s/t MAs on RBOB at 206.18. Limit risk.

Published Tuesday, May 19th, 2015

The market lacks harmony at the moment. To have any momentum in either direction the contracts must all be giving the same signal. They are not. The products are above the 8 and 13 day MAs but below the 5, whilst the crudes are below them all – admittedly not by much. The market has little immediate upside momentum and potential until all are above at least one or two of the s/t MAs, and there is no instant downside potential or momentum whilst the products are above the s/t MAs. RBOB remains the contract to watch – it has now failed four trading days in a row at 206.18, and this is the most important resistance level on the board today. It is a guide – intra-days breaches are largely irrelevant other than not holding over causes weakness (like the last four trading days). If there is to be some immediate upside RBOB must move and close (m/c) over this level – then the rest can follow. July WTI is below all the s/t MAs. They are grouped together around 60.67/78. They need to be m/cd over in order to give this contract a platform from which to rally. Meanwhile it is ok whilst over the 34 week MA at 60.01. A failure here would cause a dip to 58.96, the 5 week MA. Brent is similar. It is below all the s/t MAs located between 66.54 and 66.90.

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Posted by Robin Bieber