A Significant Move May Be Ahead in the RBOB Crack Spread

Over the past ten weeks, the spot RBOB crack spread has come into balance, having a similar weekly range over that span. The 2217-to-2769 balance bracket is in a relatively tight range for a ten-week period in the volatile spread. Additionally, the monthly chart shows a triangle formation forming over the past three months. Each monthly range has gotten smaller and remained within the previous month's range, forming a triangle shape.

The tight ten-week balance and the triangle formation are both signs that the market may be coiling for a breakout move. Acceptance above the 2769 ten-week balance may bring the market back up to the 3375 reference over time. Acceptance below the 2217 ten-week-balance low may bring the market back down to the 1268 reference over time. The market may stay in balance for several more weeks; however, when it does finally breakout, a significant move should follow.

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