Time is quickly running out for RBOB bulls, according to Walter Zimmermann, Senior Technical Analyst at United-ICAP.
Zimmermann says the six weeks since the 1.9779 high in RBOB has been “frittered away in congestion”. Viewed seasonally, he says time is quickly running out for RBOB bulls as gasoline prices always sink lower into Q4. See chart 1.
In addition, Zimmermann says all the key RBOB spreads reveal a market whose underlying support is “rotting away”. The RBOB Cracks, the RBOB minus ULSD, and spreads like May-Dec RBOB all clearly show major peaking action. Once RBOB breaks lower, Zimmermann says nothing will remain to prop it up. See chart 2.