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Weekly Crude Oil Second Leg Sideways to Down

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Market Overview: Crude Oil Futures

The market formed a weekly Crude Oil second leg sideways to down testing the June 24 low. The bulls want the 20-week EMA and the June 24 low area to act as support. The bears must create strong follow-through selling trading below the 20-week EMA and the June 24 low to increase the odds of the bear leg testing the trading range low.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - 2nd Leg Sideways to Down, Weekly Crude Oil Second Leg Sideways to Down
  • This week’s candlestick on the weekly Crude Oil chart was a bear bar closing in its lower half with a prominent tail below.
  • Last week, we said traders would see if the bulls could create more follow-through buying, or if the bears would be able to create bear bars trading below the 20-week EMA instead.
  • The market formed a retest of the June 24 low, closing slightly below the 20-week EMA.
  • Previously, the bulls got a bull leg and a buy vacuum (Jun 23) to retest the top of the trading range.
  • The market then formed a deep pullback to the middle of the trading range.
  • They view the current move as a second leg sideways to down retesting the June 24 low.
  • They want the 20-week EMA and the June 24 low area to act as support.
  • The bears see the rally (Jun 23) as a bull leg and a buy vacuum within the trading range.
  • They got a second leg sideways to down to retest the June 24 low following the double top bear flag (Jul 14 and Jul 30).
  • They want the bear leg to retest the bottom of the trading range (Apr 9).
  • They must create strong follow-through selling trading below the 20-week EMA and the June 24 low 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 more follow-through selling.
  • Or will the market stall around the June 24 low area and reverse 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 - 2nd Leg Sideways to Down
  • The market traded sideways to down below the 20-day EMA for the week. Friday traded lower but closed as a doji with a long tail below.
  • Previously, we said traders would see if the bears could create follow-through selling far below the 20-day EMA, or if the market would form strong bull bars breaking above the July 14 high instead.
  • The market traded above the July 14 high (Jul 30) but there was no sustained follow-through buying. The market then reversed to trade below the 20-day EMA.
  • Previously, the bulls got a bull leg and a buy vacuum testing the top of the trading range (Jun 23).
  • 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 see the current move as a second leg sideways to down to retest of the June 24 low and want it to be an area support.
  • They need to create strong consecutive bull bars trading above the 20-day EMA 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 was been limited.
  • This week, they got a second leg sideways to down testing the June 24 low following the double top bear flag (Jul 14 and Jul 30).
  • They want a retest of the trading range low (Apr 9).
  • They must create follow-through selling trading below the June 24 low 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 breaking below the June 24 low.
  • Or will the market stall around the June 24 low area and reverse above the 20-day EMA instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

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