The difference in the wave patterns between gasoline and crude oil charts is substantial. Well below the 2016 low, there is a huge open gap. The largest gap that I have, across all the commodities that I have looked at. This mother of all gaps, will get closed off in the years ahead, which will produce a bearish phase, that very few people will see coming.
Gasoline has created a choppy bullish phase that works better as an inverted zigzag 4th wave rally, in Intermediate degree. Our recent rally runs out of steam well before any upside breakout, which could be a wave 2 top in Minor degree. We also have an inverted Head&Shoulder (H&S) with three support price levels that technically should not hold.
There are sell stops piling up below present prices, which work as landmines that can blow-up and wreck havoc with our wave counts. Inverted “C” waves can produce some stunning moves, but they can also deposit a spike in the charts and then proceed to crash.
It may take well into April before we see a better picture, but I sure would not remain bullish with this type of pattern.
In both crude oil and gasoline COT numbers, the commercials have net short positions, and this alone can give the gasoline bulls a big headache!