Gasoline busts through resistance

March 10, 2016 11:31 AM

Fundamentally, as we head into the peak driving season RBOB Unleaded Gasoline has rallied on the latest supply data that showed weekly inventories dropped by 4.56 million barrels.

This according to Energy Information Agency (EIA) which reports on supplies of crude oil, RBOB Unleaded Gasoline, and Distillate Products which include Heating Oil and Diesel.  This weekly report typically hits the wire service on Wednesday mornings. On the demand side, Hightower is reporting that consumption over the last four weeks is up 7.01% currently as compared to a year ago. I'm of the belief that we could see a 15-20 cent rally in prices from here and that demand would still remain strong.


CME options on futures: The basics

Technically, on the daily chart below I have placed my favorite technical indicators. I call this combination of indicators the "10/20/50/BB/ Trend Finder" strategy. They are the 10-day Simple Moving Average (SMA, red line), the 20-day Simple Moving Average (SMA, green line), and the 50-day Simple Moving Average (SMA, royal blue line). I have also added the Bollinger Bands (BBs, light blue shaded area) and Candlesticks (red and green bars with the wicks).

http://media.barchart.com/cm/users/7821/XRB-daily-3-10-16.png


Moving average formulas and strategy guide

On the daily chart above my favorite indicators show me that we are in a principal trend up which is the strongest form of an upward trend that my favorite indicators can show me. This occurs when the 10-day SMA crosses up and over the 20-day SMA as both indicators are pointing up on the chart and the market trades above the 10-day SMA.

About the Author

Matt McKinney is a full-service options broker at Zaner Group both buying and selling energies, metals, grains, softs, currencies and the 30-year bond market. My strategies include time frames of 45-120 days with the ability to liquidate at any time. I can be reached at mmckinney@zaner.com.

Whether you're a novice trader who wants to participate in options on futures or an experienced trader, you can also check out my blog at http://www.mmckinneyfutures.com/.