Gasoline Price, Important Economic and Market Leading Indicator

NYMEX:RB1!   RBOB Gasoline Futures
The price of gasoline isn’t one of the ten components of the Index of Leading Economic Indicators (LEI) in the US. Nor is it included in the LEIs of the other major economies around the world. However, maybe it should be. That’s because rapidly rising gasoline prices led or coincided with all six recessions since 1973. It might be different this time because Fed policy is likely to remain stimulative even if higher gasoline prices boost the headline CPI inflation rate. The latest batch of LEIs suggests that the global economy has plenty of forward momentum for the first half of 2013. If gasoline prices continue to rise along with crude oil prices in coming weeks, then the outlook for global economic growth during the first half of the year is bound to be reflected in weaker LEIs before mid-year.

Triple Top Pattern

The Triple Top Reversal is a bearish reversal pattern typically found on bar charts, line charts and candlestick charts. There are three equal highs followed by a break below support. As major reversal patterns, these patterns usually form over a 3 to 6 month period.

Throughout the development of the Triple Top Reversal, it can start to resemble a number of other patterns. Before the third high forms, the pattern may look like a Double Top Reversal. Three equal highs can also be found in an ascending triangle or rectangle . Of these patterns mentioned, only the ascending triangle has bullish overtones; the others are neutral until a break occurs. In this same vein, the Triple Top Reversal should also be treated as a neutral pattern until a breakdown occurs. The inability to break above resistance is bearish , but the bears have not won the battle until support is broken. Volume on the last decline off resistance can sometimes yield a clue. If there is a sharp increase in volume and momentum, then the chances of a support break increase.

1. Prior Trend: With any reversal pattern, there should be an existing trend to reverse. In the case of the Triple Top Reversal, an uptrend should precede the formation.

2. Three Highs: All three highs should be reasonably equal, well spaced and mark clear turning points to establish resistance. The highs do not have to be exactly equal, but should be reasonably equivalent to each other.

3. Volume: As the Triple Top Reversal develops, overall volume levels usually decline. Volume sometimes increases near the highs. After the third high, an expansion of volume on the subsequent decline and at the support break greatly reinforces the soundness of the pattern.

4. Support Break: As with many other reversal patterns, the Triple Top Reversal is not complete until a support break. The lowest point of the formation, which would be the lowest of the intermittent lows, marks this key support level .

5. Support Turns Resistance: Broken support becomes potential resistance, and there is sometimes a test of this newfound resistance level with a subsequent reaction rally.

6. Price Target: The distance from the support break to the highs can be measured and subtracted from the support break for a price target. The longer the pattern develops, the more significant the ultimate break. Triple Top Reversals that are 6 or more months old represent major tops and a price target is less likely to be effective.


Triple tops are chart patterns with decent performance in a bull market. The failure rate is higher than I like to see, but the average decline is reasonable. Thus, if you own a stock and the triple top confirms ( price closes below the lowest valley in the pattern), then consider selling immediately.



Gas making a comeback
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QuantitativeExhaustion QuantitativeExhaustion
Weekly chart with Gasoline Futures
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Consumer saved. Was looking like trouble for awhile there.
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Perfect Storm.. Gasoline prices, which hit a 2012 low of $3.22 a gallon Dec. 19, are up 8 cents in the past two weeks and will likely continue climbing through April http://www.usatoday.com/story/news/nation/2013/01/04/gasoline-prices-starting-to-rise-again/1810175/
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Winter Gasoline Prices Why Prices Fall in the Fall

Winter gasoline blends are phased in as the weather gets cooler. September 15th is the date of the first increase in RVP, and in some areas the allowed RVP eventually increases to 15 psi. This has two implications for gasoline prices every fall. First, as noted, butane is a cheaper blending component than most of the other ingredients. That makes fall and winter gasoline cheaper to produce. But butane is also abundant, so that means that gasoline supplies effectively increase as the RVP requirement increases. Not only that, but this all takes place after summer driving season, when demand typically falls off. These factors normally combine each year to reduce gasoline prices in the fall (even in non-election years). The RVP is stepped back down to summer levels starting in the spring, and this usually causes prices to increase. But lest you think of buying cheap winter gasoline and storing it until spring or summer, remember that it will pressure up as the weather heats up, and the contained butane will start to vaporize out of the mix.

And that’s the true tale of why gasoline prices fall back in the fall, and spring forward in the spring.
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From last year this time... While gas prices normally rise this time of year, Gin said, this year's increase so far has been unusually sharp, with gas prices hitting a nationwide high in February. Higher prices take money out of the local economy, Gin wrote. In addition, higher shipping costs increase the price of other goods, and consumer confidence is undermined. http://www.nctimes.com/business/usd-economic-indicators-up-again-but-higher-gas-prices-cloud/article_e55c7f0b-d602-5534-ba4d-423bdde40479.html