Television commentators tend to follow crude oil prices higher and then lower, but with no context of the pace of the movements nor the possibility of a trend change. The focus on oil prices and for the average consumer -- gasoline prices -- is understandable. Gasoline prices have replaced the weather and sports -- until now -- in everyday conversation.
Let's look at the charts and some indicators that have a positive track record in spotting reversals.
In this daily bar chart of the continuous futures contract of crude oil, below, we can see a strong rally from December to early March followed by a correction and then another upside attempt. Prices made a lower high in June and have slowed worked lower.
Lower gasoline prices have been translated into peak inflation by many commentators. Prices are trading below the declining 50-day and the cresting 200-day moving averages. The On-Balance-Volume (OBV) line did not peak until June and its subsequent decline has been slow. The 12-day price momentum study shows a pattern of higher lows from late June for a bullish divergence -- prices are moving lower but the indicator is going higher. The pace of the decline in prices has been slowing and that can foreshadow a price reversal.