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Sunday, September 25, 2011

Brent Crude oil ag. Crude oil

The chart above shows Brent Crude oil ag. Crude oil with the spread between the two as the first indicator below and the MACD-indicator of the spread below that.
I'm not an expert on oil, but to me a spread of USD 31.62 in favor of Brent Crude oil (black line) doesn't make sense. I simply don't get it. Maybe some of you out there can explain it to me?
From a pure technical point of view, we can see Crude oil (the red line) flirting with its early August low at 79.30 and a break (close) below here will open up for a move towards the 72 area.
If there should be any sense Brent Crude oil should break below is August low at 103.91 and decline towards at least 87, which would make a USD 15 spread, which would cut the spread in more than half from the present spread.
Looking at the MACD-indicator we can see a clear double divergence, which as warns of spread loosing momentum.
I'm not much of a spread trader, but this could pose a very good trade if I'm right...

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