Short RBOB into jobs number tomorrow

Below is a more micro look into the price action for RBOB (30 min chart). We also have a few things working in our favor on this trade. Tomorrow the jobs number comes out, it’s a three day weekend, and the market has rallied pretty hard. I think all of this adds up to a selloff into the weekend. I have no reason to believe that the job market has gotten any better since last month, even if it is it feels like this market has priced in a surprise.

RBOB is trading up near resistance at 1.9283 with another resistance level overhead at 1.9687. It is also running into overbought conditions on the 30 minute time frame (as seen above in lower study). I like the risk reward of getting short at 1.9250 using a $0.05 stop (1.9750), which means RBOB would have to blow past two levels of resistance. I chose a $0.05 stop as I found out $.02 was arbitrary and to tight. Instead I got a bit scientific and am using the ATR (see daily chart below, lower study) to give it some breathing room. I think there is at least $0.10 of downside on this trade.

I shorted 3 Oct RBOB contracts @ 1.9250 with a stop at 1.9750 (0.05 stop ~ ATR).

If I get a $0.02 retracement before the close I will take it.

Comments

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