Market Overview: Crude Oil Futures
The weekly chart formed a crude oil follow-through bull bar following last week’s close above the 20-week exponential moving average and the bear trend line. The bulls want a retest of the April high. The bears hope that the market will stall around the middle of the 35-week trading range and reverse lower. For now, the odds are the move up is a bull leg within a trading range.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bull bar closing near its high.
- Last week, we said that traders will see if the bulls can create a follow-through bull bar following last week’s close above the 20-week exponential moving average and bear trend line area.
- This week was a strong follow-through bull bar closing near its high.
- The bulls want a reversal from a higher low major trend reversal (June 12) and a micro wedge (May 31, Jun 12, and June 28).
- They will need to continue creating follow-through buying trading far above the 20-week exponential moving average and the bear trend line to increase the odds of higher prices.
- The next target for the bulls is the April high.
- The bears want a retest of the May 4 low followed by a breakout below.
- They want a reversal down from a double top bear flag (Jun 5 and Jul 21) around the 20-week exponential moving average and bear trend line area.
- While they see a micro double top (Jul 12 and Jul 21), this week’s bull bar closing near its high is not a strong sell signal bar. It is a buy signal bar.
- The bears will need a strong sell signal bar before they would be willing to sell more aggressively.
- The market is in a 35-week trading range. Traders will BLSH (Buy Low, Sell High) in trading ranges until there is a strong breakout from either direction with follow-through buying/selling.
- Poor follow-through and reversals are also common within a trading range.
- While the bulls have a 4-bar bull microchannel which means persistent buying, the odds are the move up is a bull leg within a trading range.
- For now, traders will see if the bulls can continue to create follow-through buying or will next week trade slightly higher but close with a long tail above or a bear body.
The Daily crude oil chart
- Crude Oil traded sideways to up for the week following a small pullback on Monday.
- Last week, we said that the odds slightly favor at least a small second leg sideways to up after a brief pullback.
- The bulls got a reversal up from a wedge bull flag (May 31, Jun 12, and June 28) and a higher low major trend reversal.
- They then got a small second leg sideways to up retesting the July 13 high.
- The move-up is in a tight bull channel. That means persistent buying.
- The next target for the bulls is the April high.
- The bulls will need to create follow-through buying above the expanding triangle to increase the odds of higher prices.
- The bears hope that the tight channel up (since June 28) is simply a buy vacuum within the trading range.
- They want the market to reverse lower from the top of the expanding triangle.
- Crude Oil has been trading within a 35-week trading range. Poor follow-through and reversals are common in trading ranges.
- Traders will BLSH (Buy Low, Sell High) in trading ranges until there is a strong breakout from either direction with follow-through buying/selling.
- The market is currently trading around the middle of the 35-week trading range. It could be an area of balance between the bulls and bears.
- For now, traders will see if the bulls can continue to create follow-through buying or will the market stall and trade back into the previous tight trading range.
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