Market Overview: Crude Oil Futures
The market formed a weekly Crude Oil outside bull bar closing above the 20-week EMA. The bulls must create follow-through buying above the bear trend line and the 20-week EMA to increase the odds of testing the October 8 high. The bears want a retest of the October low and the bottom of the triangle from a wedge bear flag (Oct 24, Nov 7, and Nov 22).
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was an outside bull bar closing near its high and above the 20-week EMA.
- Last week, we said the market may still trade at least a little lower. Traders will see if the bears could create more follow-through selling or if the market would trade slightly lower but stall around the October or September lows area instead.
- The market opened lower but traded higher for the rest of the week.
- Last week, the bears got a strong entry bar testing near the October 29 low. However, they were not able to get follow-through selling this week.
- They see this week as a pullback. They want a retest of the October low and the bottom of the triangle from a wedge bear flag (Oct 24, Nov 7, and Nov 22).
- They want the bear trend line or the 20-week EMA to act as resistance.
- The bulls see the move to November 18 as a two-legged pullback (with the first leg being the Oct 29 low).
- They want a reversal from a wedge bull flag (Oct 1, Oct 29 and Nov 18) followed by a retest of the October 8 high.
- They must create follow-through buying above the bear trend line and the 20-week EMA to increase the odds of testing the October 8 high.
- If the market trades lower, they want the October low to be an area of support.
- So far, the market continues to have poor follow-through and frequent reversals which are the hallmarks of trading range price action.
- The overlapping candlesticks indicate the market is in a tight trading range.
- Since this week’s candlesticks is an outside 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.
- For now, traders will see if the bulls can create a strong entry bar by trading above this week’s high.
- Or will the market trade slightly higher but stall around the November 7 high area instead?
- The middle of the trading range is an area of balance and a magnet.
- The lower third of the large trading range can be the buy zone of trading range traders.
- The market is in a large trading range (Trading range high: September 29, Trading range low: May 4).
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
The Daily crude oil chart
- The market opened lower on Monday but reversed into an outside bull bar. Crude Oil then continues to trade sideways to up for the rest of the week, closing above the 20-day EMA.
- Last week, we said that traders would see if the bears can create a breakout below the October 29 low or if the market would stall around the October or September lows area and trade sideways to up in the next few weeks instead.
- Previously, the bears created another leg down to retest the October 29 low.
- They see this week as a pullback and want a reversal from a wedge bear flag (Oct 24, Nov 7, and Nov 22).
- They want a retest of the October and September lows.
- The bulls see the recent move (to Nov 18) as part of a two-legged pullback (with the first leg being the Oct 19 low).
- They want a reversal from a double bottom bull flag (Oct 29 and Nov 18), a wedge bull flag (Oct 1, Oct 29 and Nov 18) and a higher low major trend reversal.
- They want another leg up to retest the top of the triangle and the October 8 high.
- The bulls must create consecutive bull bars closing near their highs, trading far above the 20-day EMA and the bear trend line to increase the odds of a retest of the October 8 high.
- So far, the candlesticks in the last 6 weeks have a lot of overlapping ranges which indicates tight trading range price action.
- Poor follow-through and reversals are hallmarks of a trading range.
- For now, traders will see if the bulls can create follow-through buying breaking far above the November 7 high.
- Or will the market stall around the current levels followed by another leg down to retest the October or September lows instead?
- The lower third of the large trading range can be the buy zone of trading range traders.
- The middle of the trading range is an area of balance and a magnet.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
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