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Crude Oil Broke below Bear Trend Line

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Market Overview: Crude Oil Futures

The Crude Oil futures broke below bear trend line this week on the weekly chart. The bears need to create consecutive bear bars closing far below the bear trend line and September low to increase the odds of lower prices.

The bulls hope that the current move down is a retest of the September low and want a reversal higher from a double bottom major trend reversal.

Crude Oil futures

The Weekly Crude Oil chart

Crude Oil Weekly: FT Bear Bar, broke below bear trend line
  • This week’s candlestick on the weekly Crude Oil chart was a bear bar closing near the low.
  • Last week, we said that traders will see if the bears can create a follow-through bear bar. 
  • The bears got a reversal lower from a double top bear flag (October 10 and November 7).
  • This week, they got a consecutive bear bar closing near its low and below last week’s low. It was also a breakout below the major bear trend line. 
  • The September low is close enough to be a magnet next week.
  • The bears need to create consecutive bear bars closing far below the bear trend line and September low to increase the odds of lower prices.
  • The bulls hope that the current move down is a retest of the September low and want a reversal higher from a double bottom major trend reversal.
  • They want next week to close with a bull body even though Crude Oil may trade slightly lower first.
  • The move down from November 7 high is strong. The bulls will need a strong reversal bar or at least a micro double bottom before they would be willing to buy aggressively.
  • Since this week was a bear bar, it is a sell signal bar for next week.
  • For now, odds slightly favor Crude Oil to trade at least a little lower.
  • Traders will see if the bears can create follow-through selling following the breakout below the major bear trend line or if next week trades lower but reverses into a bull bar.
  • The US Government plans to refill the SPR (Strategic Petroleum Reserve) at some point around $67-72 which will likely provide a floor on price at some point and prevent a catastrophic sharp crash. (Source: US to complete 180 million barrel drawdown…)

The Daily Crude Oil chart

Crude Oil Daily: Tight Bear Channel, Double Bottom MTR?
  • Crude Oil tested near the September low on Monday but reversed to close as a doji bar with a long tail below. Wednesday continued lower with a follow-through bear bar on Friday.
  • Last week, we said that while the odds slightly favor sideways to down, Crude Oil is trading around the lower third of the trading range which is within the buy zone of trading range bulls.
  • The bears got a reversal lower from a double top bear flag with October 7 high. 
  • The move down is in a tight bear channel testing near the September low. That means strong bears.
  • The last 79 candlesticks had a lot of overlapping price action. That means Crude Oil is in a trading range between 74 and 93.
  • Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction.
  • Since Friday was a bear bar closing near the low, it is a sell signal bar for Monday. 
  • The September low is close enough and likely to be tested.
  • The bears will need to create consecutive bear bars breaking far below the major bull trend line and the September low to increase the odds of a successful breakout below.
  • The bulls got a reversal higher from a wedge pattern (June 22, July 14 and Sept 26) and a lower low major trend reversal.
  • They then got the second leg sideways to up from a higher low major trend reversal (Oct 18).
  • The bulls see the current pullback as a retest of the September low. 
  • They want a reversal higher from a double bottom major trend reversal and a parabolic wedge (Nov 10, Nov 18, and Nov 25).
  • Because of the tight bear channel down, the bulls will need a strong bull reversal bar or at least a micro double bottom before they would be willing to buy aggressively.
  • For now, odds slightly favor Crude Oil to trade at least a little lower.
  • Traders will see whether the bears can break far below the major bull trend line and September low, or the bulls can reverse higher from a double bottom major trend reversal.
  • The US Government plans to refill the SPR (Strategic Petroleum Reserve) at some point around $67-72 which will likely provide support at some point and prevent a catastrophic sharp crash. (Source: US to complete 180 million barrel drawdown…)

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