With weekly RSI pointed straight down, suggesting more weakness directly ahead, gasoline points towards an approaching confrontation with its rising 40-week (200 Day) moving average, now at $2.99. This needs to contain the selling pressure to avert downside acceleration towards a test of the major support line at $2.69 off of the December 2008 low ($0.79).

Who cares? Well, supposedly we are entering prime vacation driving season, when demand should increase -- that is, if the underlying economy is relatively robust. But is it? The most recent datapoints have been suspect.

Tomorrow, the Employment Report (Apr.) will provide additional important economic information. Judging by the enclosed ominous near-term pattern exhibited by gasoline, perhaps we should recalibrate our expectations for economic growth?

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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