Thursday, October 7, 2010

Heating Oil/ Gasoline

From yest. WTI ..
" this move is predicated upon a weaker USD and the efforts by the Fed and Treasury to stimulate the economy. Lots of talk about QE II being baked in already, AND discounted.  The new upcoming elections will no doubt produce a less deficit friendly Congress and one not shy of Fed bashing, at least at first. Between that , the accelerating problems in the Eurozone,  and inventory levels, there better be one REALLY cold winter."

And today with the blow off top in the Euro and sharp reversal, Heating Oil had it's biggest daily drop since May 6.
 Nov. HO
 click to enlarge
Rbob was not quite so severe, but it's 9.6 cent Key Reversal Day is nothing to sneeze at.
Both Rbob and Heating Oil have average seasonal highs in early and mid Oct. respectively. So with all the above in mind the Fibonacci retrace points will be looked to as potential support by the bulls, milestones on the way down by the bears. The avg. seasonal decline over 25 yr.s for Rbob is 27% into Dec. (ty WalterZ) and that puts it around 1.61, well under the May low of 1.85.
Nov Rbob
 Very short term these look a little oversold and it's possible there is a -1- down of some sort. In any event  rallies should certainly be viewed as -2- wave opps esp given the seasonal issues ..
50% would be tough to exceed.
Of course if the Euro goes to 1.60 this is all meaningless.

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