First, please stop your whining. The market is full of clues. WORK !!! Second, you listen to MAV but you do not receive. I've gotten plenty of bitching about why someone would pay me to mentor them. Let me give you an example. I've talked about the Crack Spread. Mav has talked about the Crack Spread. I've talked about inter and intra market spreads. Again, so does Mav. Throughout this entire rambling thread. But nobody FUCKING PAYS ATTENTION. Whiny lazy bitches. Let me spoon feed you this: The May17 Unleaded Gasoline Crack Spread contract are the green and red candles, the May17 Crude Oil contract are the light and dark blue bars. LOOK AT THE SIX VERTICAL DARK GREEN LINES. FOR SIX DAYS the GASOLINE CRACK SPREAD HAS TELEGRAPHED THE WORLD THAT EVENTUALLY IT WAS GOING TO DRAG CRUDE OIL HIGHER WITH IT. Spreads, man. Spreads.
Risk management/money management is an essential component of successful trading, but it is not an edge. As I noted in your thread on this topic, you need both sound money management and a coherent trading strategy to have a chance at success.
This is probably a really dumb/naive question Bone, but does that increasing crack spread for unleaded have anything to do with the summer blend changeover?
There is a seasonal tendency in the Spring for the Heating Oil to Gasoline Run changeover and vice-versa in the Fall. But you have to look at the spread - flat price won't tell you as much.
Heating oil? Not sure what that would have to do with switching the gasoline blend in particular at the refineries. If they're refining winter blend gasoline and they have to switch to summer blend, they're still using the same physical assets I would imagine. Summer blend is more costly to produce, hence the increase in the crack spread right? So the tells you sight above two months prior are there every year like clockwork I would guess. Is that not correct?
No need to get all shouty and bitter. Is gasoline crack spread really dragging the price of CL around, or it is reversed? Is CL dragging the price of gasoline crack spreads around? Eeeesh. The two seem to be confluent.
The classic 3:2:1 Gulf Coast crack spread has an ultra low sulphur diesel component. That used to be; and is in many cases, interchangeable with Heating Oil and in some cases Jet Fuel. The Fluid Catalytic Conversion components are different, and as Heating Oil demand in the NorthEast subsides with the weather, particular refineries (not all) have to shut down to exchange components (its called a run). The various blend components in gasoline are all light distillates and are much different than the heavier diesel/JP-1/kerosene/naptha/heating oil cracks.
Just looking at this chart it would appear that the crack changed direction first therefore it leads CL at this point in time. It wouldn't surprise me that if you ran a test for Granger Causality (https://en.wikipedia.org/wiki/Granger_causality) that it would indicated that the crack, statistically, leads CL ... maybe.