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Heading to the key and strong resistances. Be careful.

Published Thursday, February 18th, 2016

Introduction.  The market is performing exactly in line with the springboard (and trapdoor) theory.  Two days ago it rallied up through the short term (s/t) MAs to the very strong resistance. The s/t MAs here acted as springboards to resistance. It then failed and dumped back to the s/t MAs, which held. Yesterday it rallied again from the s/t MAs and is heading towards the strong resistance. Trapdoor theory is when the opposite happens and may well yet occur. These conditions are only in effect when the market has been developing in a range rather than a trend. Today one should expect tests of the upper end of the range and very strong resistance. These hazardous levels are on WTI firstly from 31.34 and 31.81 (both 34 day MAs) to the 32.40 level; Brent from 35.94 (long term c/p) to 36.20 (Dec 2008 low); Heat 111.73/81 (55 day and range) then 112.52 (Dec2008 low); RBOB nothing serious to 106.39 and 108.06 (both 34 day MAs); and Gasoil 329.50 (range) then 351.50 (Dec 2008 low).  Exercise extreme caution at these levels. They are the logical extent of this “springboard” move, but a move and close (m/c) over would alter the game and be very positive.

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Posted by Robin Bieber