Commodity Chart Of The Day
(click image to enlarge)
We've all felt the pain at the pump as gasoline prices have been rising for the last couple of months with little relief. I'm not expecting an abrupt end to that, but if wholesale prices back off as expected, we should see a drop in the coming weeks.
After a 75 cent appreciation in the last 2½ months, I don't see much more upside in RBOB. In fact, even as tropical storm Isaac makes its way through the Gulf of Mexico, there has been little impact outside of the temporary price spike yesterday and longer lines at the gas station in preparation.
If prices can penetrate the 8 day MA -- in October above at $2.91 -- this would set the groundwork for more selling to come. Use the Fibonacci levels as your targets on the way down. My stance is that crude oil near $90/barrel should put RBOB near $2.65/gallon.
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