Market Overview: Crude Oil Futures
The weekly chart formed another consecutive bull bar which means Crude Oil strong bulls. The market likely has flipped into Always In Long. The bears hope to get a reversal down from a large double top bear flag with November 2022 high.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was another follow-through bull bar closing near its high.
- Last week, we said that the odds slightly favor the market to trade at least a little higher and traders will see if the bulls can create more follow-through buying or will the market stall and reverse lower.
- The bulls managed to create more follow-through buying following the breakout above the trading range high.
- 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. So far, they have that.
- If the market trades lower (pullback), they want a reversal up from a higher low major trend reversal.
- The bears want a reversal down from a large double top bear flag with November 2022 high and a parabolic wedge (Jul 13, Aug 10, and Sept 15).
- The problem with the bear’s case is that the move up since June is in a tight bull channel. That means strong bulls.
- They will need a strong reversal bar or at least a micro double top before they would think to sell more aggressively.
- The bears need to create strong bear bars with follow-through selling to increase the odds of a deeper pullback.
- 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 still be in the sideways to up phase.
- The move up since June has lasted a long time and is slightly climactic. A minor pullback can begin at any moment.
- If there is a pullback, odds favor at least a small second leg sideways to up to retest the current leg high (now Sept 15).
- Traders will see if the bulls can create more follow-through buying or will the market trade slightly higher, but close with a long tail above or with a bear body.
- The bear trend lines becoming progressively less steep also indicates a loss of momentum for the bears.
- The market likely has flipped into Always In Long.
The Daily crude oil chart
- The market traded sideways to up for the week.
- Last week, we said if the bulls continue to create follow-through buying trading far above the trading range, odds will swing in favor of a successful breakout.
- The bulls got a breakout above the 41-week trading range high with follow-through buying.
- The second leg up (from August low) is strong in the form of a spike and channel.
- They want a strong breakout followed by a measured move based on the height of the 41-week trading range.
- The bulls will need to continue creating follow-through buying to increase the odds of reaching the measured move around $103.
- If the market trades lower, they want the 20-day exponential moving average to act as support followed by a retest of the current leg high (now Sept 15).
- The bears want a failed breakout above the 41-week trading range and a reversal down from a micro wedge (Sept 5, Sept 12, and Sept 15).
- They need to create strong bear bars with follow-through selling to increase the odds of a deeper pullback.
- While the market continues to slightly favor sideways to up, the recent move up is slightly climactic. A minor pullback can begin at any moment.
- If a pullback begins, a reasonable target for the bears would be the 20-day exponential moving average.
- Odds slightly at least a small second leg sideways to up after a pullback.
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