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Weekly Crude Oil Bears Need Follow-through

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Market Overview: Crude Oil Futures

The weekly Crude Oil bears need follow-through selling trading below the 20-week EMA to increase the odds of testing near the bottom of the trading range. The bulls want the 20-week EMA to act as support, followed by a retest of the June 23 high, even if it only forms a lower high.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Bear Flag, Bears Need FT, Trading Range, Weekly Crude Oil Bears Need Follow-through
  • This week’s candlestick on the weekly Crude Oil chart was an inside bear bar closing near its low.
  • Last week, we said traders would see if the bulls could create more follow-through buying to retest near the June 23 high, or if the bears would be able to develop bear bars trading below the 20-week EMA in the weeks ahead.
  • So far, the market continues to trade sideways around the middle of the trading range.
  • Previously, the bulls got a bull leg and a buy vacuum to retest the top of the trading range.
  • The market then formed a deep pullback to the middle of the trading range.
  • They want the 20-week EMA to act as support, followed by a retest of the June 23 high, even if it only forms a lower high.
  • If the market trades lower, they want the June 24 low to act as support.
  • The bulls must create strong bull bars to show they are back in control.
  • The bears see the rally (Jun 23) as a bull leg and a buy vacuum within the trading range.
  • They want the bear leg to retest the bottom of the trading range (Apr 9).
  • They see the recent sideways trading range forming a wedge bear flag (Jul 2, Jul 8, and Jul 14) and want another strong leg down.
  • At the least, they want a second leg sideways to down to retest the June 24 low.
  • They must create strong bear bars below the 20-week EMA to increase the odds of the bear leg 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 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 middle of the trading range, which is a magnet and an area of balance.
  • For now, traders will see if the bears can create follow-through selling trading below the 20-week EMA.
  • Or will the market continue to trade sideways above the 20-week EMA instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

The Daily crude oil chart

Crude Oil Daily - Wedge Bear Flag, LH, Bears Need FT
  • The market traded sideways for the week. Friday traded slightly higher but reversed into an outside bear bar, closing below the 20-day EMA.
  • Last week, we said traders would see if the bulls could create more follow-through buying, or if the move would continue to be sideways with overlapping ranges.
  • So far, the market continues to trade sideways around the 20-day EMA.
  • Previously, the bulls got a bull leg and a buy vacuum testing the top of the trading range.
  • They see the big spike down (Jun 24) as a deep pullback testing the middle of the trading range and the 20-day EMA.
  • They want the 20-day EMA to act as support.
  • They want a retest of the recent leg extreme high (Jun 23), even if it only forms a lower high.
  • They need to create strong consecutive bull bars breaking above the July 14 high to show they are back in control.
  • The bears view the move up (Jun 23) as a buy vacuum and bull leg within the trading range.
  • They got a retest of the middle of the trading range, but the follow-through selling has been limited.
  • They see the recent sideways trading range forming a wedge bear flag (Jul 2, Jul 8, and Jul 14) and lower highs (Jul 18 and Jul 25).
  • They must create follow-through selling below the 20-day EMA to increase the odds of the bear leg testing the bottom of the trading range.
  • 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 follow-through selling far below the 20-day EMA.
  • Or will the market continue to hold above the 20-day EMA, followed by strong bull bars breaking above the July 14 high instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

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