Minute Mo Failure May Have Stemmed RBOB Correction

January 20, 2017 2:43AM CST

From a long-term perspective the weekly log scale chart of the Feb contract clearly shows the dominant trend to be up with former 1.52-to-1.46-range resistance a key new support candidate.  If there is a place to beware the end or bottom of the latest bull market correction, we believe it will be from this range.

A threat to a more immediate bullish count is the currently historically frothy 82% reading in our proprietary RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC.  At 82% reflecting 81K longs to just 18K shorts, it's not hard to find fuel for downside vulnerability.  So something's gotta give:  either this former 1.52-to-1.46-range prospective support or a reward for the preponderance of Managed Money bulls.

NY Gasoline Weekly

NY Gasoline Daily

After a clear 5-wave rally from Nov's low to either 29-Dec's 1.6798 high close or 03-Jan's 1.7095 intra-day high, we confirmed a correction or reversal lower count following 09-Jan's bearish divergence in momentum discussed in that day's Technical Blog .  Against the backdrop of the long-term uptrend, our bias remains one of first approaching this relapse as a correction within the secular uptrend.  And thus far the market's proximity to a Fibonacci minimum 38.2% retrace of Nov-Dec's rally leaves this market well within the bounds of a bull market correction.  These daily charts also show the market thus far holding ABOVE former 1.52-handle-area resistance-turned-support from late-Oct.

NY Gasoline Daily

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