The December RBOB crack spread has been a 21.86 to 28.21 balance bracket over the few weeks. Additionally, the crack has been coiling near the bottom of that balance bracket over the last 3 days. During the last 3 days, the market has been rotating around a relatively tight 3 day value range of 21.70 to 22.45
BE READY FOR A BREAKOUT
When a volatile market such as the RBOB crack is contained within such a tight balance for an extended period of time, a significant move usually follows the break from balance. It is possible that the market continues to rotate around the 3 day value range, for the time being but be prepared for the breakout.
UPSIDE REFERENCES
If the market gains acceptance above the 21.70 to 22.45 three day value range, it may test the 23.02 to 23.29 gap. If the market gains acceptance above that gap, it may test the next higher gap of 24.56 to 25.03
DOWNSIDE REFERENCES
If the market gains acceptance below the 21.70 to 22.45 three day value range, it may test the 20.95 to 21.07 gap below. If the market gains acceptance below that gap, it may test the next lower gap of 19.82 to 20.27
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