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Monthly Crude Oil Lower High

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Market Overview: Crude Oil Futures

The market formed a monthly Crude Oil lower high, closing the monthly candlestick with a long tail above. The bears want the market to form another lower high and a failed breakout from the triangle pattern. The bulls hope to get a retest of the July 15 high, even if it forms a lower high.

Crude oil futures

The Monthly crude oil chart

Crude Oil Monthly - Retest Jan High or DT Bear Flag, Monthly Crude Oil Lower High
  • The January monthly Crude Oil candlestick was a bull bar closing in its lower half with a long tail above.
  • Last month, we said the market may still trade sideways to up (perhaps in the first half of the month). Traders would see if the bulls could create a follow-through bull bar or if the market would trade higher but close the monthly candlestick with a long tail above or a bear body instead (failed breakout from ii pattern).
  • The market traded higher in the first half of the month followed by sideways to down from mid-month onwards.
  • The bears want the market to form another lower high and a failed breakout from the triangle pattern.
  • They want a reversal from a double top bear flag (Apr 12 and Jan 15).
  • If the market trades higher, they want the July or April highs to act as resistance.
  • The bulls got a reversal from a double bottom bull flag (Jun 4 and Sep 10) and a larger double bottom bull flag (Dec 13 and Sep 10).
  • They got a breakout above the ii (inside inside) pattern and a measured move (based on the height of the ii pattern) which took them to the July high area.
  • The candlestick had a long tail above which indicates that the bulls are not yet as strong as they hope to be.
  • They need to create follow-through buying to increase the odds of retesting the trading range high (Sept 28).
  • At the very least, they hope to get a retest of the July 15 high, even if it forms a lower high.
  • So far, the market remains in a trading range.
  • Traders will see if the bulls can create a retest of the July 15 high.
  • Or will the market trade back into the triangle pattern instead, testing the 20-month EMA?
  • The middle of the large trading range (around the 20-month EMA) 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.
  • That means buying in the lower third and selling in the upper third of the trading range.
  • Poor follow-through and reversals are the hallmarks of a trading range.

The Weekly crude oil chart

Crude Oil Weekly - Bears Want Bear Leg, Bulls Want 2nd Leg
  • This week’s candlestick on the weekly Crude Oil chart was a follow-through bear bar closing in its lower half with a small tail below.
  • Last week, we said that traders would see if the bears could create a strong follow-through bear bar or if the market would form a retest of the January 15 high in the next 1-2 weeks (even if it forms a lower high or a one-or-two bar pullback retest) instead.
  • The bears got a follow-through bear bar testing near the 20-week EMA.
  • They got a reversal from a double top bear flag (Jul 5 and Jan 15).
  • They see the recent move as a buy vacuum and a bull leg within a trading range.
  • They want a retest of the middle of the trading range (around the 20-week EMA area) followed by a retest of the bottom of the triangle.
  • If the market trades higher, they want a reversal from a lower high major trend reversal. They want the July high to act as resistance.
  • The bulls see the last two weeks as a pullback.
  • They hope to get a retest and a breakout above the July high.
  • At the very least, they want a small sideways to up leg to retest the recent leg extreme high (Jan 15), even if it forms a lower high.
  • If the market trades lower, they want the 20-week EMA to act as support.
  • So far, the market remains in a large trading range.
  • The recent move could still only be a buy vacuum and a bull leg within a 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 middle of the large trading range is an area of balance and a magnet.
  • For now, traders will see if the bears can create more follow-through selling trading below the 20-week EMA.
  • Or will the market stall around the 20-week EMA followed by a retest of the January 15 high in the next few weeks (even if it forms a lower high) instead?

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