Hints Of An Ending Bull Market

On February 26, 2013 by TradingDesk

Monday’s trading session posted big reversals in several major stock and commodity markets, after an overnight head fake in Italian election sent risk assets surging. Early morning gains (higher than prior days’ high prices) were wiped out and values from RBOB & HO to the S&P 500 and DJIA settled lower than previous day’s lows. The outside down pattern formed on charts by this price action suggests the end of a bull market, although it will take more than a single day to prove the move. That said, energy markets haven’t wasted any time following through on the selling, with high RVP March RBOB off nearly 9 cents, and the low RVP contracts off 7, with HO down nearly a nickel.

It’s notable that US Equity markets and both WTI and Brent crude grades are not selling off nearly as much as refined products, which suggests that perhaps some of the speculative length that has flooded into RBOB and HO over the past few weeks may be heading for the exits. RBOB must hold below $3, and HO below $3.08 today for any chance at a new bear market, rather than just a correction of a 3 month bull run, is to take hold.

CLICK HERE for a PDF of this morning’s charts

 

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