Market Overview: Crude Oil Futures
The market is in a Crude Oil retest of prior high. Bulls want a retest and breakout above the March 9 high, with sustained follow-through buying. If the market trades higher, bears want a failed breakout above the March 9 high, with prominent upper tails or bear bars.
Crude oil futures
The Monthly crude oil chart
- March formed a large bull bar closing in its upper half, with a long tail above, testing the 2022 high.
- Bears see the rally as a buy climax overshooting the 2022 high.
- They view the current move as a retest of the recent leg extreme high (March 9) and want a lower high or double top.
- If the market trades higher, they want a failed breakout above the March 9 high, with prominent upper tails or bear bars.
- Bears need strong bear bars to demonstrate control.
- Bulls got a strong spike up on March 9, but the long upper tail indicates profit-taking.
- They want a retest and breakout above the March 9 high, with sustained follow-through buying.
- Bulls need consecutive strong bull bars to increase the odds of a successful breakout.
- The market formed a strong bull bar following the Middle East conflict breakout.
- Traders are watching whether bulls can generate follow-through buying for a breakout above the March 9 high, or if the market fails above it with a long upper tail or bear bar.
- For now, the market could still trade higher in the first half of the month.
- Any escalation or de-escalation in the Middle East could accelerate or reverse the current move.
The Weekly crude oil chart
- This week’s candlestick was a bull bar closing near its high, with a prominent lower tail.
- Last week, we said traders would watch whether bulls could retest the March 9 high, even if it forms a lower high, or if the market would continue sideways and pull back to the 20-week EMA.
- The market pulled back slightly early in the week but reversed sharply higher on Thursday.
- Bulls got a strong spike up on March 9, but the long upper tail shows profit-taking at higher prices.
- They want at least a small sideways to up leg retesting the March 9 high, even if it forms a lower high. The move is underway.
- Bulls need consecutive strong bull bars to increase the odds of a breakout above the March 9 high.
- Bears see the March 9 move as a parabolic buy climax.
- They view the current move as a retest and want a lower high or double top.
- If the market trades higher, they want a failed breakout above the March 9 high, followed by strong bear bars.
- Bears need consecutive bear bars closing near their lows to show control.
- The market formed a parabolic buy vacuum above the 2022 high (March 9), followed by a deep pullback, creating a 1-bar trading range.
- Traders may continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
- The middle of the range acts as a magnet and area of balance.
- Traders will watch whether bulls can generate a breakout above the March 9 high with sustained follow-through, or if the market fails above it with prominent upper tails or bear bars.
- Any escalation or de-escalation in the Middle East could accelerate or reverse the current move.
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