There was a daily-scale bottom extension in Rbob gasoline futures yesterday. This is the second such signal from petroleum-based energy futures in recent weeks – the last one was in WTI crude futures in mid-July which led to a $5 bounce. That signal is just about out of date now (15 days is the shelf-life of daily signals) and now we have this new signal in gasoline. It looks like another bounce is coming so we would buy Gasoline now and probably crude too.
We still have an outstanding ‘long’ recommendation in natural gas futures from a bottom extension ten days ago. That market has traded sideways since then and we generally suggest abandoning trades that stem from bottom extensions after ten or twelve days if the price has not rebounded. At least tighten protective stops here and prepare to exit if prices do not firm very soon.
