Market Overview: Crude Oil Futures
The weekly Crude oil bears need follow-through selling below the August 13 low. They see this week as a pullback and want the 20-week EMA and the bear trend line to act as resistance. The bulls hope the 20-week EMA or the August 13 low area will act as support.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was an inside bull doji closing in its lower half with a long tail above.
- Last week, we said the market could still trade at least a little lower. Traders would see if the bears could create a strong follow-through bear bar below the 20-week EMA, or if the market would trade lower, but stall around the August 13 low area instead.
- There was no follow-through selling below the 20-week EMA this week.
- The bulls view the recent move (Sep 2) as the third leg sideways to down.
- They hope the 20-week EMA or the August 13 low area will act as support.
- If the market trades lower, they want the lower third of the trading range to be areas of support.
- They need to create consecutive bull bars trading far above the 20-week EMA and the bear trend line to show they are back in control.
- The bears view the recent move (Sep 2) as a pullback and got a larger double top bear flag (Jul 30 and Sep 2).
- They want another strong leg down to test the bottom of the trading range.
- They see this week as a pullback and want the 20-week EMA and the bear trend line to act as resistance.
- They must create strong follow-through selling, trading far below the 20-week EMA and the August 13 low to increase the odds of testing the trading range low.
- The market remains in a large trading range.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction of the trading range, accompanied by 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 middle of the trading range, which is a magnet and an area of balance.
- The market has been trading sideways around the 20-week EMA in the last 5 weeks.
- Traders will see if the bears can create more follow-through selling below the 20-week EMA.
- Or will the market stall around the August 13 low area, followed by a reversal above the 20-week EMA instead?
- Poor follow-through and frequent reversals are hallmarks of trading ranges.
The Daily crude oil chart
- The market traded sideways to up in the first half of the week, testing the 20-day EMA. Friday traded lower but closed as an outside bull doji with a long tail above.
- Last week, we said traders would observe if the bears could create more follow-through selling, or if the market would trade slightly lower but stall around the August 13 low area instead.
- So far, there is no follow-through selling below the August 13 low.
- The bulls see the current move as the third leg down, forming the wedge pattern.
- They want the August 13 low to be an area of support.
- They want a reversal from a large wedge bull flag (Jun 24, Aug 13, and Sep 5) and a double bottom bull flag (Aug 13 and Sep 5) to retest the trading range high.
- If the market trades lower, they want the lower third of the trading range to act as support.
- They need to create strong consecutive bull bars trading far above the 20-day EMA and the bear trend line to show they are back in control.
- The bears see the recent move (Sep 2) as a pullback forming a larger double top bear flag (Jul 30 and Sep 2).
- They want another strong leg down to test the bottom of the trading range.
- They want the 20-day EMA or the bear trend line to act as resistance. This appears to be the case for now.
- They must create a strong breakout below the August 13 low with sustained follow-through selling to increase the odds of testing the trading range low (Apr 9).
- 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 buying in the lower third and selling in the upper third of the trading range.
- The market is currently trading around the middle of the trading range, which is a magnet and an area of balance.
- For now, traders will see if the bears can create more follow-through selling trading below the August 13 low.
- Or will the market stall around the August 13 low area, followed by a reversal above the 20-day EMA instead?
- Poor follow-through and frequent reversals are hallmarks of trading ranges.
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