Frank Petricca is writer of “Petricca’s Pick” focusing on a Long Term approach for commodity traders that have an interest in Long term accumulation. Frank has worldwide recognition spurring innovation that points to communicating a different way to approach ones investment portfolio using commodity instruments. Contact Frank at 312-690-7763.
Today’s Long Term Pick is to sell short gasoline futures (RBOB)
Gasoline futures are in fact within my upper 25% parameter (Please call me personally for free Long Term charts) where fundamental considerations are bearish.
Seasonal tendencies for gasoline futures normally reach their lowest levels in December and peak late summer as the driving season ends.
Spot gasoline futures bottomed December 9th 2022 at 2.0204 and topped out at 2.9936 July 28th. Today gasoline futures are trading 2.8413.
ENERGY COMPLEX COLLAPSE IMMINENT DUE TO THE EV EVELOUTION
The Longer Term fundamental factors are, in my opinion, extremely bearish as the ratio of electric cars to gas cars will gradually increase substantially.
By 2025, electric vehicle sales could comprise up to 20% of new car sales.
By 2030, electric vehicle sales could reach 40% of new car sales.
By 2040, electric vehicle sales could account for nearly ALL new car sales.
With all good technologies, there comes a time when buying the alternative no longer makes sense…
How about smartphones the past decade, color TV’s in the 70s, or even gasoline cars in the early 20th century.
Predicting the timing of these major transformative events, however, is difficult.
But when it happens one should be prepared and positioned correctly.
I call it “Episodic Volatility”
Being “in the market” when a major market move occurs.
Make no mistake –
No one can predict when the Big Energy Crash will occur…
But I can tell you we have already experienced the COVID-19 induced energy debacle when crude oil plunged to an all-time low of -40.32 in April of 2020. Yes, crude oil futures actually traded into negative territory.
Gasoline prices also traded 0.3760 in March of 2020 just above the 1986 low of 0.3035.
While there will in fact be hurricanes that gyrate price levels in the short term…
And of course –
Saudi Arabia that continues to intentionally raise prices and expected to extend output cuts for the third month in a row, capitalizing on Russia’s war on Ukraine…
We must also understand that –
The American Petroleum Institute continues to report increases in gasoline supplies. This week they reported a 1.4-million-barrel increase.
While there are no guarantees I will be selling all rallies for March gasoline futures.
My Long Term objective is the lower 25% of the Long Term trading range which is the 0.9702 level.
Those of you that have an interest in learning more about my Long Term strategies should contact me personally at 312-690-7763.
In the mean time –
Have a great year trading…
Questions? Comments? Please call.
312-690-7763Questions? Ask Frank Petricca today at 312-690-7763.