Market Overview: Crude Oil Futures
The market formed a Crude Oil bull leg within the trading range. The bulls hope to get a breakout above the top of the trading range and a measured move based on the height of the trading range. The bears want the upper third of the trading range to act as resistance.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was an inside bear bar closing in its upper half with a long tail below.
- Last week, we said traders would BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling. The middle of the trading range can be a magnet (around the $67 area).
- The market formed a retest of the middle of the trading range on Monday followed by sideways to up for the rest of the week.
- The bulls got a bull spike to retest the top of the trading range.
- They hope to get a breakout above the top of the trading range and a measured move based on the height of the trading range.
- They must create consecutive bull bars closing near their highs to increase the odds of a successful breakout.
- The bears see the current move as a bull leg and a buy vacuum within the trading range.
- They want the upper third of the trading range to act as resistance.
- They must create strong bear bars with follow-through selling to show they are back in control.
- The market remains in a large trading range.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
- That means selling in the upper third and buying in the lower third of the trading range.
- The market is currently trading around the upper third of the trading range which could be the sell zone of trading range traders.
- As strong as the current move is, it could still be a buy vacuum and a bull leg within the trading range.
- The middle of the trading range can be a magnet (around the $67 area).
- The market remains volatile due to the renewed conflict in the Middle East and how it is being handled.
- Poor follow-through and frequent reversals are hallmarks of trading ranges.
The Daily crude oil chart
- The market formed a pullback to the middle of the trading range on Monday but there was no follow-through selling. The market formed a retest of the Jun 13 high on Friday closing as a bull bar with a long tail above.
- Last week, we said the market remains in a large trading range. The middle of the trading range can be a magnet (around $67).
- The bulls got a big bull spike testing the top of the trading range.
- They want a breakout above the top of the trading range followed by a measured move based on the height of the trading range.
- The current move is in the form of a tight bull channel and a 12-bar bull microchannel. That means strong bulls. However, it is also slightly climactic.
- If there is a pullback, they want the 20-day EMA to act as support, forming a higher low.
- The bears see the current move as a buy vacuum and bull leg within the trading range.
- They want the upper third of the trading range to act as resistance.
- They see Friday forming a lower high and a small double top (Jun 13 and Jun 20).
- They must create strong bear bars to show they are back in control.
- For now, the market remains in a large trading range.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
- There may be buyers below the first pullback below the 12-bar bull microchannel.
- The middle of the trading range can be a magnet (around $67).
- The market is trading around the upper third of the trading range which can be the sell zone of trading range traders.
- The renewed conflict in the Middle East will keep prices volatile depending on how the issue is handled.
- Poor follow-through and frequent reversals are hallmarks of trading ranges.
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