HO · Energy / Refinery Crack
Z33302 – [HO] HO 3:2:1 Crack Regime Signal
3:2:1 crack regime measures the full refiner margin on turning 3 barrels of crude into 2 gasoline plus 1 distillate (ULSD / Heating Oil). Elevated composite margin has been bullish for Heating Oil.
At a glance
Current reading
-0.636
Signal state
Stretched
106 days in Stress phase
Phase
-0.71
Positive equals crack margin bullish regime; negative equals crack margin bearish regime.
Sample
Multi-year window
Daily cadence
As of Nov 09, 2026. Updated nightly.
SIGNAL OVERVIEW
3:2:1 crack regime measures the full refiner margin on turning 3 barrels of WTI crude into 2 barrels of RBOB gasoline plus 1 barrel of ULSD. The ULSD leg IS Heating Oil (same fuel, same contract since the 2013 refactor). When the composite refiner margin runs elevated, Heating Oil has historically rallied through the distillate leg’s contribution to total refiner profitability. The empirical phase pattern (see regime table) shows Phase +1 (Crack margin bullish) delivers +2.77 pp edge on 27 percent sample; Phase -1 (Crack margin bearish) delivers -0.27 pp on 34 percent sample. 3.04 pp spread via the 3:2:1 refinery crack regime channel.
LIVE CHART
HO HO 3:2:1 Crack Regime Signal
What the chart is showing right now. The dark line is the HO 3:2:1 Crack Regime composite value, tanh-bounded. The bronze line in the middle panel is NYMEX Heating Oil front-month continuous close. The bottom panel tracks the trailing 252-day Spearman information coefficient. Positive composite reflects crack margin bullish regime; negative composite reflects crack margin bearish regime.
COMPOSITE
-0.636 / tanh
STATE
Stretched
PHASE
-0.71
PHASE +1 EDGE
+2.77 pp
PHASE -1 EDGE
-0.27 pp
TODAY’S PLAYBOOK READING
STATE
STRETCHED
STATE AND HISTORY
HO 3:2:1 Crack Regime signal firing at composite -0.636, 106 trading days running in current phase. Phase +1 delivers plus 5.47 percent Heating Oil fwd60d; Phase -1 delivers plus 2.43 percent.
THE MECHANISM
The signal takes 2 times RBOB front-month continuous + 1 times Heating Oil front-month continuous minus 3 times WTI front-month continuous, z-scored against 252-day rolling window, tanh-bounded.
HOW TO POSITION
HO 3:2:1 Crack Regime overlay for Heating Oil. Phase +1 firings reflect crack margin bullish regime. Phase -1 firings reflect crack margin bearish regime. Pair with related HO signals for stacked conviction.
WHAT THE CHART SHOWS
The composite sits at -0.636 in the current band. HO 3:2:1 Crack Regime signal reading in current regime through late 2026.
TOP INPUTS FIRING
- Primary composite -0.636 State Stretched, 106 days running in current phase.
- 3.04 pp spread, 3:2:1 refinery crack regime channel Phase +1 edge +2.77 pp on 27 percent sample; Phase -1 edge -0.27 pp on 34 percent sample via 3:2:1 refinery crack regime channel.
THE TAKEAWAY
What this means for you today
THE CALL
Composite -0.636, current state Stretched. HO 3:2:1 Crack Regime signal reading in current band through late 2026. Phase Stress firing for 106 trading days.
THE EMPIRICAL CONTEXT
Phase +1 edge +2.77 pp on 27 percent sample. Phase 0 edge -1.67 pp on 39 percent sample. Phase -1 edge -0.27 pp on 34 percent sample. 3.04 pp spread.
THE HONEST CAVEAT
3:2:1 crack conflates gasoline + distillate margins; distillate-specific signal is noisier. Weight assumes standard refinery yield; actual yield varies by refiner. Z-score smoothing dampens short-horizon margin spikes. Daily IC not individually significant on all sampling windows.
THE REGIME MAP
The three phases, Heating Oil forward returns and sample share
Regime table captures phase-conditional edges on Heating Oil forward 60-day returns from live-window trading days. Phase +1 minus Phase -1 spread via the 3:2:1 refinery crack regime channel.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Crack margin bullish | +1 | 26.9% (2431 d) | +5.47% | +2.77pp | Apr 2025, Mar 2025, Jan 2025 | |
| Normal | 0 | 39.3% (3545 d) | +1.04% | -1.67pp | Jun 2026, Jun 2026, Feb 2026 | |
| Crack margin bearish TODAY | -1 | 33.8% (3047 d) | +2.43% | -0.27pp | Jun 2026, Jun 2026, Mar 2026 |
The historical pattern
Signature episodes
THE TRACK RECORD
Every state change in the last 2 years
125 state transitions from 11/11/2024 to 11/09/2026. Full history (2017 total transitions since 12/03/1990) is downloadable.
| State | Start | End | Duration | Fwd 60d HO |
|---|---|---|---|---|
| Defensive | 11/11/2024 | 11/11/2024 | 1d | +0.34% |
| Neutral | 11/12/2024 | 11/14/2024 | 3d | +1.33% |
| Expansion | 11/15/2024 | 11/15/2024 | 1d | +4.09% |
| Defensive | 11/18/2024 | 11/18/2024 | 1d | +3.66% |
| Neutral | 11/19/2024 | 11/22/2024 | 4d | +3.59% |
| Defensive | 11/25/2024 | 11/25/2024 | 1d | -0.05% |
| Neutral | 11/26/2024 | 12/04/2024 | 6d | -1.07% |
| Expansion | 12/05/2024 | 12/06/2024 | 2d | -3.89% |
| Neutral | 12/09/2024 | 12/12/2024 | 4d | -4.76% |
| Expansion | 12/13/2024 | 12/13/2024 | 1d | -8.74% |
| Neutral | 12/16/2024 | 12/18/2024 | 3d | -7.25% |
| Expansion | 12/19/2024 | 12/20/2024 | 2d | -3.24% |
| Defensive | 12/23/2024 | 12/23/2024 | 1d | -5.16% |
| Neutral | 12/24/2024 | 12/24/2024 | 1d | -4.53% |
| Expansion | 12/26/2024 | 12/27/2024 | 2d | -4.30% |
| Neutral | 12/30/2024 | 01/02/2025 | 3d | -3.59% |
| Expansion | 01/03/2025 | 01/03/2025 | 1d | -5.23% |
| Neutral | 01/06/2025 | 01/09/2025 | 4d | -5.18% |
| Expansion | 01/10/2025 | 01/10/2025 | 1d | -14.47% |
| Neutral | 01/13/2025 | 01/14/2025 | 2d | -5.64% |
| Defensive | 01/15/2025 | 01/15/2025 | 1d | -9.93% |
| Neutral | 01/16/2025 | 01/17/2025 | 2d | -8.88% |
| Defensive | 01/21/2025 | 01/21/2025 | 1d | -12.83% |
| Neutral | 01/22/2025 | 02/03/2025 | 9d | -13.20% |
| Defensive | 02/04/2025 | 02/04/2025 | 1d | -7.20% |
| Neutral | 02/05/2025 | 02/10/2025 | 4d | -6.20% |
| Defensive | 02/11/2025 | 02/11/2025 | 1d | -6.65% |
| Neutral | 02/12/2025 | 02/14/2025 | 3d | -6.47% |
| Defensive | 02/18/2025 | 02/20/2025 | 3d | -3.91% |
| Neutral | 02/21/2025 | 02/24/2025 | 2d | -0.85% |
| Defensive | 02/25/2025 | 02/25/2025 | 1d | -1.92% |
| Neutral | 02/26/2025 | 03/06/2025 | 7d | -1.93% |
| Expansion | 03/07/2025 | 03/07/2025 | 1d | +3.50% |
| Neutral | 03/10/2025 | 04/01/2025 | 17d | +6.31% |
| Defensive | 04/02/2025 | 04/02/2025 | 1d | +9.45% |
| Neutral | 04/03/2025 | 04/10/2025 | 6d | +15.08% |
| Expansion | 04/11/2025 | 04/11/2025 | 1d | +17.21% |
| Neutral | 04/14/2025 | 04/14/2025 | 1d | +15.67% |
| Defensive | 04/15/2025 | 04/15/2025 | 1d | +16.22% |
| Neutral | 04/16/2025 | 05/06/2025 | 14d | +18.35% |
| Defensive | 05/07/2025 | 05/07/2025 | 1d | +12.48% |
| Neutral | 05/08/2025 | 05/13/2025 | 4d | +11.13% |
| Defensive | 05/14/2025 | 05/14/2025 | 1d | +8.23% |
| Neutral | 05/15/2025 | 05/20/2025 | 4d | +8.85% |
| Defensive | 05/21/2025 | 05/21/2025 | 1d | +10.37% |
| Neutral | 05/22/2025 | 05/27/2025 | 3d | +9.73% |
| Defensive | 05/28/2025 | 05/28/2025 | 1d | +9.80% |
| Neutral | 05/29/2025 | 06/10/2025 | 9d | +8.88% |
| Defensive | 06/11/2025 | 06/11/2025 | 1d | +7.80% |
| Neutral | 06/12/2025 | 06/17/2025 | 4d | +7.42% |
| Defensive | 06/18/2025 | 06/18/2025 | 1d | +10.62% |
| Neutral | 06/20/2025 | 06/24/2025 | 3d | +11.06% |
| Defensive | 06/25/2025 | 06/25/2025 | 1d | +9.32% |
| Neutral | 06/26/2025 | 07/01/2025 | 4d | +8.98% |
| Defensive | 07/02/2025 | 07/02/2025 | 1d | +6.67% |
| Neutral | 07/03/2025 | 07/08/2025 | 3d | +6.13% |
| Defensive | 07/09/2025 | 07/09/2025 | 1d | +7.24% |
| Neutral | 07/10/2025 | 07/15/2025 | 4d | +6.93% |
| Defensive | 07/16/2025 | 07/16/2025 | 1d | +7.52% |
| Neutral | 07/17/2025 | 07/22/2025 | 4d | +3.98% |
| Defensive | 07/23/2025 | 07/23/2025 | 1d | +4.17% |
| Neutral | 07/24/2025 | 07/29/2025 | 4d | +4.72% |
| Defensive | 07/30/2025 | 07/30/2025 | 1d | +5.88% |
| Neutral | 07/31/2025 | 08/05/2025 | 4d | +7.15% |
| Defensive | 08/06/2025 | 08/06/2025 | 1d | +7.44% |
| Neutral | 08/07/2025 | 08/12/2025 | 4d | +7.88% |
| Defensive | 08/13/2025 | 08/13/2025 | 1d | +3.94% |
| Neutral | 08/14/2025 | 08/19/2025 | 4d | +4.03% |
| Defensive | 08/20/2025 | 08/20/2025 | 1d | +5.32% |
| Neutral | 08/21/2025 | 08/26/2025 | 4d | +5.72% |
| Defensive | 08/27/2025 | 08/27/2025 | 1d | +0.91% |
| Neutral | 08/28/2025 | 09/02/2025 | 3d | +1.56% |
| Defensive | 09/03/2025 | 09/05/2025 | 3d | +5.77% |
| Neutral | 09/08/2025 | 09/08/2025 | 1d | +5.14% |
| Defensive | 09/09/2025 | 09/10/2025 | 2d | +5.45% |
| Neutral | 09/11/2025 | 09/15/2025 | 3d | +4.28% |
| Defensive | 09/16/2025 | 09/18/2025 | 3d | +4.18% |
| Neutral | 09/19/2025 | 09/23/2025 | 3d | +2.57% |
| Defensive | 09/24/2025 | 09/25/2025 | 2d | +1.99% |
| Neutral | 09/26/2025 | 09/30/2025 | 3d | +3.48% |
| Defensive | 10/01/2025 | 10/02/2025 | 2d | +3.27% |
| Neutral | 10/03/2025 | 10/07/2025 | 3d | +2.66% |
| Defensive | 10/08/2025 | 10/09/2025 | 2d | +2.17% |
| Neutral | 10/10/2025 | 10/14/2025 | 3d | +5.60% |
| Defensive | 10/15/2025 | 10/16/2025 | 2d | +4.51% |
| Neutral | 10/17/2025 | 10/21/2025 | 3d | +3.91% |
| Defensive | 10/22/2025 | 10/23/2025 | 2d | +1.46% |
| Neutral | 10/24/2025 | 10/28/2025 | 3d | +1.73% |
| Defensive | 10/29/2025 | 10/30/2025 | 2d | +1.18% |
| Neutral | 10/31/2025 | 11/04/2025 | 3d | +1.76% |
| Defensive | 11/05/2025 | 11/20/2025 | 12d | +1.76% |
| Neutral | 11/21/2025 | 11/21/2025 | 1d | +4.61% |
| Defensive | 11/24/2025 | 11/26/2025 | 3d | +2.04% |
| Neutral | 11/28/2025 | 12/01/2025 | 2d | +0.86% |
| Defensive | 12/02/2025 | 12/04/2025 | 3d | +0.71% |
| Neutral | 12/05/2025 | 12/08/2025 | 2d | -0.64% |
| Defensive | 12/09/2025 | 12/11/2025 | 3d | -0.70% |
| Neutral | 12/12/2025 | 12/16/2025 | 3d | -2.30% |
| Defensive | 12/17/2025 | 12/18/2025 | 2d | -0.09% |
| Neutral | 12/19/2025 | 12/23/2025 | 3d | -3.05% |
| Defensive | 12/24/2025 | 12/26/2025 | 2d | -5.39% |
| Neutral | 12/29/2025 | 12/30/2025 | 2d | -6.22% |
| Defensive | 12/31/2025 | 12/31/2025 | 1d | -7.32% |
| Neutral | 01/02/2026 | 01/06/2026 | 3d | -4.81% |
| Defensive | 01/07/2026 | 01/08/2026 | 2d | -4.44% |
| Neutral | 01/09/2026 | 01/13/2026 | 3d | -2.60% |
| Defensive | 01/14/2026 | 01/16/2026 | 3d | -0.62% |
| Neutral | 01/20/2026 | 01/20/2026 | 1d | +3.55% |
| Defensive | 01/21/2026 | 01/22/2026 | 2d | +3.61% |
| Neutral | 01/23/2026 | 01/27/2026 | 3d | +2.15% |
| Defensive | 01/28/2026 | 01/29/2026 | 2d | +2.66% |
| Neutral | 01/30/2026 | 02/03/2026 | 3d | +2.85% |
| Defensive | 02/04/2026 | 02/05/2026 | 2d | +5.02% |
| Neutral | 02/06/2026 | 02/10/2026 | 3d | +4.80% |
| Defensive | 02/11/2026 | 02/11/2026 | 1d | +6.60% |
| Neutral | 02/12/2026 | 02/17/2026 | 3d | +8.52% |
| Defensive | 02/18/2026 | 02/20/2026 | 3d | +9.02% |
| Neutral | 02/23/2026 | 02/23/2026 | 1d | +7.52% |
| Defensive | 02/24/2026 | 02/26/2026 | 3d | +7.84% |
| Neutral | 02/27/2026 | 02/27/2026 | 1d | +9.42% |
| Defensive | 03/02/2026 | 06/01/2026 | 64d | +9.34% |
| Neutral | 06/02/2026 | 06/02/2026 | 1d | +1.52% |
| Defensive | 06/03/2026 | 06/05/2026 | 3d | +2.00% |
| Neutral | 06/08/2026 | 06/09/2026 | 2d | +3.51% |
| Defensive LIVE | 06/10/2026 | current | 106d | +6.17% |
Scroll inside the table for the full history. Forward 60-day HO is measured from each run’s start date; a reader cannot trade off a start-date they only identify in hindsight, so this is a transparency log, not an alpha claim. Asterisked (*) returns are partial. The run is less than 60 trading days old. The full 60-day comparable fills in as more data arrives.
What this measures
3:2:1 crack regime: full refiner margin on turning 3 crude into 2 gasoline plus 1 ULSD / Heating Oil. Elevated composite signals refiner profitability and historically bullish Heating Oil. Target NYMEX Heating Oil front-month continuous.
Why it matters
Why HO 3:2:1 Crack Regime matters for Heating Oil
Elevated 3:2:1 refinery crack regime (3 WTI crude feed yielding 2 gasoline + 1 distillate) reflects composite refiner margin expansion; the distillate leg transmits bullish Heating Oil pricing via combined refiner profitability signal. The signal takes 2 times RBOB front-month continuous + 1 times Heating Oil front-month continuous minus 3 times WTI front-month continuous, z-scored against 252-day rolling window, tanh-bounded. Transmission is via the 3:2:1 refinery crack regime channel.
How to use this signal today
HO 3:2:1 Crack Regime overlay for Heating Oil. Phase +1 firings reflect crack margin bullish regime; Phase -1 firings reflect crack margin bearish. Pair with companion HO signals listed in Related.
Risk overlay
Three limitations. 3:2:1 crack conflates gasoline + distillate margins; distillate-specific signal is noisier. Weight assumes standard refinery yield; actual yield varies by refiner. Z-score smoothing dampens short-horizon margin spikes. Daily IC not individually significant on all sampling windows.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 10, 2026 04:24 PM ET