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Weekly Crude Oil Bear Flag

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Market Overview: Crude Oil Futures

The market is forming a weekly Crude Oil bear flag on the weekly chart. The bulls must create more bull bars to increase the odds of retesting the June 23 high. The bears see the last two weeks as a pullback and want another strong leg down from a lower high.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Bulls Want Retest High, or Bear Flag, Weekly Crude Oil Bear Flag
  • This week’s candlestick on the weekly Crude Oil chart was a bull bar closing near its high and above last week’s high.
  • Last week, we said traders would see if the bears could create another leg down by trading below the 20-week EMA, or if the market would trade sideways around the 20-week EMA for a few weeks instead.
  • The market opened lower but there was no follow-through selling. The market traded sideways to up for the week.
  • 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.
  • 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. So far, the market is holding above the 20-week EMA.
  • They must create more bull bars to increase the odds of retesting the June 23 high.
  • 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 last two weeks as a pullback and want another strong leg down from a lower high.
  • They must create strong bear bars trading 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 bulls can create more follow-through buying to retest near the June 23 high.
  • Or will the market trade slightly higher but stall and retest the 20-week EMA in the weeks ahead instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

The Daily crude oil chart

Crude Oil Daily - Bulls Want Retest High, or Wedge Bear Flag
  • The market opened lower on Monday but there was no follow-through selling. Crude oil traded sideways to up for the week.
  • Previously, we said traders would see if the bears could get a strong second leg sideways to down, or if the market would trade slightly lower but lack follow-through selling instead.
  • So far, there has been no follow-through selling after the big spike down.
  • Previously, the bulls got a bull leg and a buy vacuum testing the top of the trading range.
  • They see the big spike down 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, forming a higher low.
  • They want a retest of the recent high (Jun 23), even if it only forms a lower high.
  • The bulls must create strong consecutive bull bars to increase the odds of a retest of the June 23 high.
  • The bears see 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 last two weeks forming a wedge bear flag (with the first two legs being Jul 2 and Jul 7).
  • They must create strong bear bars trading 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 bulls can create more follow-through buying. If they can, that would increase the odds of a retest near the June 23 high.
  • Or will the move be sideways with overlapping ranges instead? If this is the case, that would increase the odds of at least a small sideways to down leg to retest the June 24 low.
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

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