The chart in question is WTI crude oil, the main U.S. benchmark for oil prices.
Bitcoin BTC$79,890.73 traders, and traders in other markets, should keep an eye on it because oil appears to be at an inflection point, with a big move likely. And that move could have major implications for inflation and risk assets.
The daily WTI chart looks like a funnel lying on its side. The wide price swings of March and April have steadily contracted, with lower peaks and shallower dips narrowing toward a tight neck near $102.
Chart watchers call this a coil or pennant pattern. The market is getting tighter and tighter, like a spring. Sooner or later it breaks free. When it does, the move is often big, as Naomi Blohm, senior market advisor at agri-advisory firm Total Farm Marketing, said on X.
That’s the standard read of triangles by traders and analysts.
Here is the catch. The pattern does not say which way oil breaks, meaning the big move can happen in either direction, which leaves us with two scenarios.
Two possibilities
Say oil breaks higher, beyond the upper end of the funnel/triangle, currently near $105.50. Above it, the focus would shift to March and April highs near $117 to $119.
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