Well, let's get back to basics, since timing here on daily moves has been tough.
Are we still mired in a long term downtrend? Have things at least cleaned up a
little over the past two weeks? Is the physical overhang somewhat
counterbalanced by concerns over a widening of military action against other
nations, say Iran/Iraq? If you answered yes to all of these, you're eligible to
read further...

Just some facts:

*The US Northeast is now seeing the coldest temperatures all season, yet heat
cracks lost value yesterday.
*Gas cracks are still holding the $7.00 range, a sign the market is still
willing to give gas season the benefit of the doubt but not much more.
*Russia is still a concern for overproduction. A very soft economy and a desire
for hard currency could easily lead Russian oil companies to cheat the recent
quota.



The technical pattern looks very much like a bearish head and shoulders(see
chart below, I'm referring only to the most recent range between $18 and $22).
At the very least, it implies we will test the neckline again in the next two
weeks. This comes in right at $18.00. A close below would signal thew move
towards $14.00 that looks inevitable for now since the dominant channel is a
downward one. You can also see how we've had difficulty establishing $20.00 as
resistance or support; this is key since it will determine whether the next move
is to $24 or $17.25. Since gas is the seasonal product and gas cracks are still
firm, the range is still dominant. I would expect a close below $18.00 would be
coupled with a move back to or below $6.00 on Q2 gas cracks. But for now, expect
the move back towards $18.00 to get funds shorter again, then also expect the
market to use those new shorts as an upside squeeze play.
(Embedded image moved to file: pic05882.pcx)


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