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Correction phase. Watch RBOB at the 34 at 127.42.

Published Thursday, December 24th, 2015

Introduction.  By this time yesterday the contracts had achieved everything  that was technically expected of them. Brent, for example, holding the Dec’ 2008 low and target to 36.20. All objectives lower had been hit and held, and with the holiday period looming a correction higher was due and likely. Selling the lowest short term (s/t) MAs – the 5 day – was not recommended, other than on RBOB, which eventually scythed above and closed over all the s/t MAs. The contracts are in a correction higher phase. Bears should sit and wait. The downtrend is intact but it is not time to re-set shorts yet. The key to this correction and the next leg is dependent on two issues – firstly how Brent, Heat and Gasoil perform at the 13 day MAs. They are all over the 5 and 8s but still below the 13s around 38.08 Brent; 114.60 Heat; and 345.75 Gasoil. Secondly, and more importantly is how RBOB performs. It closed above all the s/t MAs, and should now head for the 34 day at 127.42. This is the most important resistance on the board today – watch it, and the higher 34 at 128.50 for guidance. A move confirmed by a close (m/c) over would give this correction more bite and staying power.

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Posted by Robin Bieber