Rbob Gasoline futures have been falling along with the other main energy contracts (except for Natural gas) since the top extension we reported in Crude Oil on October 2nd. There have been a few bottom extensions in energy-related stock indices, as we have been reporting in recent additions, indicating that the drop has been getting a bit overdone and now we have an extension in one of the core contracts:
We already advised covering energy shorts and reversing into long positions and this new signal merely confirms that view. There is longer-term support around here from some weekly-scale compressions in Heating oil that are still 'in date', so we suspect that this drop is just the normal 'return to compression' that usually occurs when a move starts with a compression break.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com