If you have been following along, I had suggested buying the WZ/CZ spread at between 180 and 175. We had a good rally up to almost the 2.10 level. However, there is major resistance at that level if we look at the above chart. Going all the way back to February, for 6 months, the 2.06 to 2.09 level has been a wall of resistance. I would not want to be long this spread again until we test the 1.80 to 1.70 level once again. If the supply/demand flips, there might not be real good support until the 1.55 level. That being said, I’d be willing to buy against the 1.70 support level. Until then, play the short side, as always with an exit strategy to pull the rip cord if we rally back 20 cents. I personally don’t see that happening, but if you are short here, make sure you use a disciplined stop loss.
CER