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No Weekly Follow-through Selling in Crude Oil

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Market Overview: Crude Oil Futures

There was no weekly follow-through selling in Crude oil futures and the market reversed above the 20-week EMA. The bulls must create strong follow-through buying above the 20-week EMA and the bear trend line to show they are back in control. The bears view the current move as a pullback, forming a larger double top bear flag (Jul 30 and Sep 26).

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - No FT Selling, Bulls Need FT Buying, No Weekly Follow-through Selling in Crude Oil
  • This week’s candlestick on the weekly Crude Oil chart was an outside bull bar closing in its upper half with a small tail above.
  • Last week, we said traders would see if the bears could create more follow-through selling below the 20-week EMA, or if the market would stall around the August 13 low area, followed by a reversal above the 20-week EMA instead.
  • The market traded slightly lower but lacked follow-through selling, reversing sharply above the 20-day EMA.
  • The bulls view the recent move (Sep 5) as the third leg sideways to down.
  • They hope the 20-week EMA or the August 13 low area will act as support. So far, this appears to be the case.
  • They hope to create a strong bull leg to retest the trading range high (Jun 23).
  • They must create strong follow-through buying above the 20-week EMA and the bear trend line to show they are back in control.
  • The bears view the current move as a pullback, forming a larger double top bear flag (Jul 30 and Sep 26).
  • They want the 20-week EMA or the July 30 high to act as resistance.
  • They must create strong bear bars trading far below the 20-week EMA to increase the odds of 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, accompanied by 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.
  • The market has been trading sideways around the 20-week EMA in the last 7 weeks.
  • For now, traders will see if the bulls can create follow-through buying above the 20-week EMA.
  • Or will the market reverse below the 20-week EMA again instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

The Daily crude oil chart

Crude Oil Daily - No FT Selling, Bulls Need FT Buying
  • The market traded slightly lower early in the week but lacked follow-through selling. The market then traded sideways to up above the 20-day EMA for the rest of the week.
  • Last week, we said traders would see if the bears could create more follow-through selling trading below the August 13 low, or if the market would stall, followed by a reversal above the 20-day EMA instead.
  • The bulls see the recent move (Sep 5) as the third leg down, forming a wedge pattern.
  • They want a reversal from a large wedge bull flag (Jun 24, Aug 13, and Sep 5) and an embedded wedge bull flag (Sep 5, Sep 12, and Sep 22) to retest the trading range high.
  • They want the August 13 low and the 20-day EMA to be areas of support. So far, this appears to be the case.
  • They need to create strong consecutive bull bars trading far above the 20-day EMA and the September 2 high to show they are back in control.
  • The bears view the recent move as a pullback forming a larger double top bear flag (Jul 30 and Sep 26) and a smaller double top bear flag (Sep 2 and Sep 26).
  • They want another strong leg down to test the bottom of the trading range.
  • They want the 20-day EMA, the September 2 or July 30 highs to act as resistance.
  • They must create strong bear bars trading far below the 20-day EMA to increase the odds of testing the trading range low (Apr 9).
  • 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 trading above the 20-day EMA and the September 2 high.
  • Or will the market stall around the September 2 high area, followed by a reversal below the 20-day instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

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