Double-bottom breakdown in Goldman Sachs and technical breakdowns in oil and gasoline bear watching whether correction or worse

Oil continued its drop today, and gasoline as well, while Goldman Sachs (which identified $85 as a target for oil) experienced a double-bottom breakout and dropped too. Breakdowns in these can signal consequences for the broader markets as well, so they bear watching. You can see in my charts for WTIC and UGA (an ETF for gasoline), as well as GS, below, that the drop can be corrective if support kicks in, but we cannot guarantee that at this point. I've mentioned that one target for oil can be the 200-day moving average; while in UGA, we'll see if it gets support at the .382 retracement that it just got to today, or ultimately rolls over to test lower. The large volumes on the decline make me suspect that lower levels are likely ahead. As for oil - perhaps oil could get support in a partial pullback and then move up again to test higher for the $85 level ... we'll see. Meantime, as readers know from my monthly chart, I'm concerned that the kissback to the broken channel trendline can set oil up for much lower prices. There have been news reports recently making a case for oil at $20, and I could see that in the charts, where there's plenty of chart support around that level.

The default P&F chart (at Stockcharts.com) shows a preliminary target price for WTIC at $48 (after a triple bottom breakout two days ago). Interestingly, the default P&F chart for UGA still sports a bullish target at $39.50, but acknowledges a "High Pole Warning" that triggered with today's decline. As for Goldman Sachs itself - the P&F chart shows a "Double Bottom Breakdown" today with a preliminary target at $122 (that chart is shown at above right).

My weekly GS chart below shows that its stock price tested down - again - to a downtrendline line that it broke above. Price looks like it is "stepping down" along that line, even though it is not a classic pattern line. There can be risk that the Elliott Wave count for GS completed only a bear market rally, implying a restest of its lows, but for now it's too soon to say that it's doing anything different from a correction. I had been thinking that its most recent rising wave up looked like a bearish diagonal wedge, and if that's the case then a retest of the lows should be expected, but we'll just have to let it play out some more to be more certain.

Most likely the decline in Goldman Sachs' stock price is technical, as I've been tracking it for a while and noted here that it had entered a Fibonacci retracement cluster zone, or may prove (coincidentally) to be linked in some way to the decline of oil. There have been stories that GS got involved more than passively with the price of oil, meaning it participated in some inventorying of it. And yes, I'm aware of more recent stories this week about GS involving software code, which I don't see as relevant at all for its company performance or stock price. I'm inclined to think it's more of a technical correction, and will continue to keep an eye on it from that basis. After all, it is a major component of the financial sector, so a significant move in GS alone can have a real impact on XLF and other ETF's tracking the financial sector. I've included a chart of the XLF at right - definitely a swoon, as it also lost support by moving under its 50 and 200 day moving averages.