Last week I shared that a long-term “Head & Shoulders” pattern could be forming in Gasoline charts below (see post here)
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Below is an update of Gasoline on a shorter term basis.
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Hope is not a strategy, yet in some ways I hope the H&S read is correct, because many have shared with me they really don’t care to pay $4 per gallon at the pump! Still too early to tell if the H&S is correct, yet it does increase the potential when support of this rising wedge is starting to look weak.
Jeff… The post highlighted that a “potential H&S pattern” was at hand. My comment was that if gasoline broke above the $2.50 level (which has been resistance for a good while on this monthly chart) odds would favor my read was wrong and the breakout in gas could usher in much higher prices at the pump. This pattern, if true, suggests that gas should fall in price. Since we live in a risk management world, I always want to share how I could be wrong and what should happen when I am.
Right now IMHO, the charts are suggesting some weakness in the oil patch should be close at hand. As always, time will tell.
Chris, I assume oil is also showing signs of falling? Not for sure, but I expect that if gasoline is going to fall, oil will too.
Chris:
Your prior recent commentary said the H&S pattern in the gasoline contract chart suggested that retail gasoline prices could rise. You said this could cause financial hardship for many people “at the pump” and you also said the effect of higher gasoline prices on the national economy would be adverse. Did you therefore intend to say you hoped the (bullish) H&S pattern in the chart of gasoline prices was IN-correct?