Market Overview: Crude Oil Futures
The Crude oil bulls want a second leg sideways to up following any pullback. Bulls believe the market has flipped into Always In Long. If the market trades higher, bears want the June 3 high area to act as resistance, forming a lower high (relative to the May 18 high).
Crude oil futures
The Weekly crude oil chart
- This week formed a bull bar, closing in its upper half with a prominent upper tail.
- Last week, we said traders would watch whether bulls could create follow-through buying above the 20-week EMA to retest the middle of the trading range, or whether the market would trade slightly higher but close with a long tail above or a bear body instead.
- Bulls created follow-through buying, testing the middle of the trading range.
- Bulls want a strong bull leg to retest the high of the trading range.
- Bulls believe the market has flipped into Always In Long.
- If the market forms a pullback, bulls want the move to be weak and sideways, with prominent lower tails, forming a higher low followed by a large second leg sideways to up.
- Bulls want the 20-week EMA to act as support.
- Bulls need sustained follow-through buying to increase the odds of testing the high of the trading range.
- Bears see the current move as a buy vacuum bull leg testing the middle of the trading range.
- Bears want the middle of the trading range to act as resistance. If the market trades higher, bears want the June 3 high area to act as resistance, forming a lower high (relative to the May 18 high).
- Bears need consecutive strong bear bars to show control.
- The market formed a bull leg testing the middle of the trading range.
- The market is likely Always In Long.
- Traders will watch whether bulls can create more follow-through buying to retest the high of the trading range.
- Traders will also watch whether the market stalls around the middle of the trading range, followed by a pullback to retest the 20-week EMA in the weeks ahead.
- The move up is strong enough for traders to expect at least a small sideways to up leg to retest the leg extreme high (now July 23) after a pullback.
- The middle of the trading range is an area of balance and can act as a magnet.
- 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.
The Daily crude oil chart
- The market traded higher, testing the middle of the trading range, followed by a pullback on Friday.
- Last week, we said traders would watch whether bulls could create more follow-through buying to test the middle of the trading range, or whether the market would trade higher but stall 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.
- Bulls hope to get a strong bull leg to retest the high of the trading range.
- Bulls believe the market has flipped into Always In Long.
- If the market forms a pullback, bulls want the move to be weak and sideways, stalling around the 20-day EMA, followed by a large second leg sideways to up to retest the current leg extreme high (July 23).
- Bears see the current move as a buy vacuum bull leg testing the middle of the trading range.
- Bears hope to get a two-legged sideways to down pullback from a parabolic wedge (July 8, July 14, and July 23), testing the 20-day EMA.
- Bears need to create consecutive strong bear bars breaking strongly below the bull trend line to indicate strength.
- After that, they want the retest of the bull leg extreme high (now July 23) to be weak, with overlapping bars and prominent upper tails, forming a lower high and a double top.
- Bears hope the middle of the trading range will act as resistance.
- If the market trades higher, bears want the June 3 high to act as resistance.
- The market formed an 11-bar bull microchannel, indicating strong bulls and increasing the odds of at least a small second leg sideways to up after a pullback.
- There will likely be buyers below the first pullback.
- The market has likely flipped into Always In Long.
- Traders will watch whether bulls can create more follow-through buying to test the high of the trading range, or whether the market forms a pullback to retest the 20-day EMA instead.
- If a pullback forms, traders will watch its strength, whether it contains consecutive strong bear bars or is weak, with overlapping candlesticks and prominent lower tails.
- The middle of the trading range can act as an area of balance and a magnet.
- 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.
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