Equity Markets Rally

On August 26, 2013 by TradingDesk

The day after the NASDAQ’s “flash freeze”, equity markets rallied despite dismal housing data carrying energy prices along with more pronounced saber-rattling coming out of the middle east. RBOB and HO settled barely off their respective major resistance levels at 3.0 and 3.1 while Brent-WTI spread continued to shrink as WTI gained about 1.50 and Brent settling only $4/bbl over the light-sweet blend. Short-sellers seemed reluctant to jump in ahead of the weekend fearing a deeper draw in Cushing stocks for September and further violence in Egypt, Libya, and Lebanon.

Gulf coast pipeline prices slid about 2 cents across the board and California gas gained a steep 17 cents while other markets remained quiet. NYMEX gasoline futures seemed to bear the brunt of the run-up from the refinery issues including Pt. Arthur’s extended outage and a scare at Pennsylvania’s Trainer Refinery regarding their catalytic cracker.

A firm settle above aforementioned resistance levels and we could see a further run-up in gas and diesel prices over the next week. If these level remain intact, a retreat to the 2-week long/strong sideways pattern is likely.

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