Market Overview: Crude Oil Futures
Crude Oil breakout from the tight trading range on the weekly chart. The bulls want a measured move based on the height of the tight trading range which will take them near the July high. The bears want the market to form a lower high and the top of the triangle to act as resistance. If the market trades higher, they want the October or July highs to act as resistance.
Crude oil futures
The Monthly crude oil chart
- The December monthly Crude Oil candlestick was an inside bull bar closing near its high and above the 20-month EMA.
- Last month, we said that traders would see if the bears could create a strong bear entry bar and a breakout below the September 10 low and triangle pattern. Or if the bulls would be able to create a retest of the top of the triangle instead.
- The market formed an ii (inside inside) pattern in December and January has broken out above it.
- The bears want the market to form another lower high.
- They want the top of the triangle to act as resistance.
- They hope that January will close with a long tail above or with a bear body.
- The bulls see the sideways to down move (to Sep 10) as a two-legged pullback (the first leg being June 4).
- They want 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 in January and hope to get a strong entry bar.
- They want a strong breakout above the triangle pattern.
- At the very least, they want a measured move based on the height of the ii (inside inside) pattern which will take them near the July high.
- So far, December formed an ii (inside inside) pattern which means the market is in breakout mode.
- January has broken out above the ii (inside inside) pattern.
- For now, the market may still trade sideways to up (perhaps in the first half of the month).
- Traders will see if the bulls can create a follow-through bull bar.
- Or will the market trade higher but close the monthly candlestick with a long tail above or a bear body instead (failed breakout from ii pattern)?
- The middle of the large trading range is an area of balance and a magnet.
- The increasingly tight triangle pattern indicates that Crude Oil is in a breakout mode.
- The market is in a trading range (sideways overlapping candlesticks).
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a big bull bar closing near its high and above the 20-week EMA.
- Last week, we said that traders would see if the bulls could create a breakout above the wedge bull flag (Oct 29, Nov 18, and Dec 6) and test the top of the triangle. Or if the market would continue to chop sideways and test the bottom of the tight trading range instead.
- The bulls got a strong breakout bar testing the top of the triangle.
- They want a measured move based on the height of the tight trading range which will take them near the July high.
- They want a strong breakout above the top of the triangle with sustained follow-through buying.
- They need to create consecutive bull bars closing near their highs to increase the odds of a successful breakout above the triangle.
- The bears want the market to form a lower high and the top of the triangle to act as resistance.
- If the market trades higher, they want the October or July highs to act as resistance.
- They see the market as still being in a trading range.
- So far, the market has broken out above the tight trading range.
- Odds slightly favor the market trade at least a little higher towards the October 8 high area.
- Traders will see if the bulls can create sustained follow-through buying over the next few weeks.
- Or will the market trade slightly higher but stall around the October 8 high area instead?
- The market remains in a large trading range. Odds favor the current move to be a bull leg within the trading range.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
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