Market Overview: Crude Oil Futures
The weekly Crude oil bulls need follow-through bull bars to increase the odds of a strong bull leg. If the market trades higher, bears want the May 6 low or the middle of the trading range to act as resistance.
Crude oil futures
The Weekly crude oil chart
- This week formed a bull bar, closing near its high and above the 20-week EMA.
- Last week, we said traders would watch whether bears could generate a larger second leg sideways to down, breaking decisively below the March 10 low, or whether the market would stall around the March 10 or March 2 low, followed by a pullback to test the middle of the trading range in the weeks ahead.
- Bulls see the recent move (July 2) as a sell vacuum bear leg testing the low of the 19-week trading range (March 10).
- Bulls want the low of the trading range to act as support.
- Bulls want a strong bull leg to retest the high of the trading range.
- Bulls hope the market has flipped into Always In Long (two consecutive bull bars, with at least one being big and closing near its high).
- Bulls need sustained follow-through buying to increase the odds of a strong bull leg.
- If the market trades lower, bulls want the move to be weak and sideways, forming a higher low followed by a second leg sideways to up.
- Bears generated a strong bear leg, testing the low of the 19-week trading range (March 10).
- Bears see the current move as a pullback and want it to be weak, with overlapping candlesticks and prominent upper tails, forming a lower high.
- Bears hope the 20-week EMA or the bear trend line will act as resistance.
- Bears want a large second leg sideways to down.
- If the market trades higher, bears want the May 6 low or the middle of the trading range to act as resistance.
- The market formed a bear leg testing the bottom of the trading range, followed by a pullback over the last two weeks.
- So far, traders continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the trading range until there is a strong breakout with sustained follow-through.
- Traders will watch whether bulls can create follow-through buying above the 20-week EMA to retest the middle of the trading range, or whether the market trades slightly higher but closes with a long tail above or a bear body instead.
- The middle of the trading range is an area of balance and can act as a magnet.
The Daily crude oil chart
- The market traded sideways to up above the 20-day EMA this week.
- Last week, we said traders would watch whether bears could generate a strong retest of the July 2 low, followed by a larger second leg sideways to down, or whether the market would form a second leg sideways to up to test the June 22 high instead.
- Bulls see the recent move (July 2) as a sell vacuum bear leg testing the low of the trading range (March 10).
- Bulls hope the trading range low (March 10) will act as support.
- Bulls hope to get a bull leg to retest the middle of the trading range, followed by a test of the high of the range.
- Bulls need consecutive bull bars closing near their highs and breaking far above the 20-day EMA and the bear trend line to increase the odds of a strong bull leg.
- If the market trades lower, bulls want the move to be weak and sideways, forming a higher low major trend reversal followed by a larger second leg sideways to up.
- Bears created a strong bear leg testing the low of the trading range (March 10).
- Bears see the current move as a pullback and want it to be weak, with overlapping bars and prominent upper tails.
- Bears want a retest of the July 2 low, even if it only forms a higher low.
- Bears want the bear trend line or May’s low to act as resistance, forming another lower high.
- Bears need consecutive strong bear bars to show control.
- The market tested the low of the trading range, followed by a pullback over the last two weeks.
- So far, traders continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the trading range until there is a strong breakout with sustained follow-through.
- Traders will watch whether bulls can create more follow-through buying to test the middle of the trading range, or whether the market trades higher but stalls around the May 6 or May 29 low area, followed by a pullback to test the July 2 low, even if it only forms a higher low.
- The middle of the trading range can act as an area of balance and a magnet.
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