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The trade in August RBOB that just triggered


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The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday. The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness. Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had cut the growth forecast to 1.2 million bpd in June this year. U.S. oil output was expected to grow by 1.8 million bpd in 2019, which would be slower than the 2.2 million bpd increase recorded in 2018, these volumes will come into a market where demand growth is coming down is what the IEA opinion is for this month.

That is the headline opinion from IEA this week which weighs on the oil fundamentals. Here at TradeGuidance, we like to call and trade what we can see and for this morning, we present a RBOB [Gasoline] trade idea which is a trade we are currently in and plays out as a measurement from this Monday's lows for August'19 RB @ 1.9161 to the low we made off the drop in Crude oil yesterday to 1.8207. That measurement gives us the following trade idea which we took advantage of and has a 1.7982 profit target on the Short setup which we have just begun trailing:

rb-ti-71919

Here is a view of the underlying chart and measurements

rb-c-71919

Note that while WTI Crude has rolled to the September'19 expiration, RB continues to trade the August'19 expiration and will roll at the end of the month.

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About the author


Murali Sarma, Vice President of Business Integrations Inc., is an internationally known commodities analyst, author, trader and business consultant who has demystified commodity trading and introduced numerous futures trading strategies and indicators to traders - professional, non-professional and the novice trader - throughout the world. Murali began his trading career in the pre-dot-com bubble in 1998, electing to seek instruments to trade which had lesser volatility and offered more predictable analysis. From about 1999 to 2002, Murali traded out of the UK and moving to the US after that and working mostly independently with individual traders while learning from some of the best analysts and traders. While not being formally certified as a commodities trader, Murali preferred to hone in on his analysis and trading skills versus adding academically to his credentials. Murali believes that is isn’t about being right or wrong on your calls, it is about making money!

Murali has helped several traders become successful over the last 10+ years of active futures trading and has a strong following of traders who like to seek out opportunities in the futures markets on a daily basis versus following the old “buy & hold” investing adage. While not being opposed to switching hats and becoming an “investor” every so often with swing trades in the equities markets, Murali prefers to trade what he can see on charts using multiple timeframes and handcrafted indicators suited for all types of markets. Murali excels in trading sideways and choppy markets with a scalping style of being in-out of intraday markets when there is no defined trend, and on most other days prefers trading to his own computed target levels during the intraday timeframe, while following the trend.

In recent months, Murali has started a Twitter based alert service for intraday futures traders who like to trade commodities and index futures, and elected to blog post his daily analysis in commodities like WTI Crude & Gold and index future instruments like YM, NQ, ES & RTY. You may contact him via his email at info@tradeguidance.com

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