About to Tank

On July 29th the December ULSD/crude spread closed below the 100-day Moving Average for the first time since early May.  This triggered and entry signal for the blog, so a hypothetical short position was entered at $13.84 (premium ULSD).  Initially, we are risking to a two-consecutive day close above $15.94.

Recall that this is happening after the spread briefly pushed above the 200-day Moving Average and rolled over.  When this happened last year, the spread continued to decline for several months and dropped over fifteen dollars per spread.  Just in case this is a replay of2015, we will be watching for setups to pyramid the position.