RBOB has witnessed significant selling since its late August highs, with looming economic growth fears and potential consumer weakness at play. However, recent jobs data paints an encouraging near-term picture for RBOB.
Recent Economic Developments:
Last week’s figures from the Atlanta Fed GDP Now model for Q4 reported a growth rate of 1.2%, falling short of the expected 1.8%. Last week's JOLTs numbers for job openings were at 8.73 million, below the expected 9.3 million, and ADP Non-Farm Payrolls on December 6th registered 103k, lower than the anticipated 130k. Initially signaling a weakening labor market, these signs prompted expectations of interest rate cuts as early as March 2024. However, Friday's unemployment and nonfarm payrolls figures surprised to the upside, showing strength in job creation, pushing interest rate cuts back to May of 2024.
The Goldilocks Narrative:
The Goldilocks narrative for risk assets appears to be in play, with job openings possibly fewer, but job creation and high employment still evident. Michigan consumer sentiment reached its highest level since September, and 1-year and 5-year inflation expectations were lower. Both crude and gasoline act as coincident and forward-looking commodities. These recent figures suggest consumers are more optimistic about inflation and the economy's direction, indicating continued high gasoline demand.
Major Support:
Major support for RBOB is evident at $2.00-$2.08/gallon. A break and close below this level could lead to further liquidation. Conversely, the 21-Day EMA will serve as overhead resistance in the near term; a break and close above this level would be imperative for a potential reversal.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Recent Economic Developments:
Last week’s figures from the Atlanta Fed GDP Now model for Q4 reported a growth rate of 1.2%, falling short of the expected 1.8%. Last week's JOLTs numbers for job openings were at 8.73 million, below the expected 9.3 million, and ADP Non-Farm Payrolls on December 6th registered 103k, lower than the anticipated 130k. Initially signaling a weakening labor market, these signs prompted expectations of interest rate cuts as early as March 2024. However, Friday's unemployment and nonfarm payrolls figures surprised to the upside, showing strength in job creation, pushing interest rate cuts back to May of 2024.
The Goldilocks Narrative:
The Goldilocks narrative for risk assets appears to be in play, with job openings possibly fewer, but job creation and high employment still evident. Michigan consumer sentiment reached its highest level since September, and 1-year and 5-year inflation expectations were lower. Both crude and gasoline act as coincident and forward-looking commodities. These recent figures suggest consumers are more optimistic about inflation and the economy's direction, indicating continued high gasoline demand.
Major Support:
Major support for RBOB is evident at $2.00-$2.08/gallon. A break and close below this level could lead to further liquidation. Conversely, the 21-Day EMA will serve as overhead resistance in the near term; a break and close above this level would be imperative for a potential reversal.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.