Market Overview: Crude Oil Futures
The market formed a Crude Oil follow-through buying on the monthly chart testing the 9-month trading range high. The bulls want a breakout above and a measured move-up. The bears want a failed breakout above the trading range and the beginning of the bear leg.
Crude oil futures
The Monthly crude oil chart
- The August monthly Crude Oil candlestick was a small consecutive bull bar closing near its high.
- Last month, we said that traders would see if the bulls can create a follow-through bull bar or will the market trades slightly higher but stalls around the trading range high area.
- The bulls got a reversal up from a wedge bull flag (Dec 9, Mar 20, and May 4) and a double bottom (Mar 20 and May 4).
- In August, they got a follow-through bull bar following July’s close above the 20-month exponential moving average and bear trend line.
- They want a resumption of the bull trend and see the yearlong move down from June 2022 simply as a large wedge bull flag.
- They will need to create a strong breakout above the 9-month trading range with follow-through buying to increase the odds of a reversal.
- The bears hope to get a reversal down from around the trading range high area.
- They hope that the current move up is simply a bull leg within the 9-month trading range.
- If the market trades higher, they want a failed breakout from above the trading range.
- Since August was a bull bar closing near its high, odds are September will trade at least a little higher, which it has done.
- Traders will see if the bulls can create a strong bull bar closing above the April high or will the market trade slightly higher but stall and reverse back into the 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.
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 the prior move up was in a 7-bar bull microchannel which increases the odds that the first pullback will be minor. Traders will see if the bears can continue to create consecutive bear bars or will the bulls be able to create a retest of the recent leg high (Aug 10).
- The bulls managed to create a retest of the August 10 high and a breakout above the trading range high this week.
- They want a strong breakout above the trading range and a measured move based on the height of the 41-week trading range.
- They need to create sustained follow-through buying to increase the odds of a successful breakout and reversal up.
- The bears got a small pullback testing near the 20-week exponential moving average (EMA).
- They see this week simply as a retest of the August 10 high and want a reversal down from a double top (Aug 10) around the trading range high.
- They hope that the strong move up was simply a buy vacuum test of the trading range high.
- They will need to create consecutive bear bars closing near their lows to increase the odds of the bear leg beginning.
- Since this week was a bull bar closing near its high, it is a buy signal bar for next week.
- Odds slightly favor the market to trade at least a little higher.
- Traders will see if the bulls can create follow-through buying or will the market trade slightly higher, but close with a long tail above or with a bear body.
- The market is in a 41-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.
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