Chart of the Day – Wednesday, May 1, 2024

Three chart reasons to be short $UGA
1. Resistance at upper boundary of massive triangle
2. H&S top
3. Trendline violation pic.twitter.com/BuvdcJh6d7

— Peter Brandt (@PeterLBrandt) May 1, 2024

Today’s Chart of the Day was shared by Peter Brandt (@PeterLBrandt).

• Peter points out that Summer vacation just got a little cheaper today, as oil-related commodities broke down. The chart shows the US Gasoline ETF ($UGA) in a weekly (left) and daily (right) timeframe.

• Gasoline ($UGA) dropped -3.7% today, marking its worst day since November. Oil prices have been trending higher all year, renewing fears over inflation. However, Peter points out that $UGA may have peaked.

• $UGA opened the door to further downside today after breaking the neckline of a Head & Shoulders Top, around $70. This bearish pattern formed after $UGA failed to break the upper bounds of a two-year Triangle pattern.

The takeaway: Inflation fears resurfaced in March as commodities started to perk up. The market narative relapsed from “AI Driven Bull Market” to “Rampant Inflation.” However, many of those commodities, including Gasoline ($UGA), are starting to roll over.