Market Overview: Crude Oil Futures
The Crude oil futures is still in the bear leg forming a 6-bar bear micro channel on the weekly chart. The bears hope that this week was simply a pullback and want a retest of the May 4 low. The bulls will need to create a follow-through bull bar to increase the odds of retesting the 20-week exponential moving average.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bull bar with a prominent tail above.
- Last week, we said that traders will see if the bears can continue to get consecutive bear bars or will the market trade slightly lower but close with a long tail below or a bull body.
- This week broke below the inside bar but reverse to close with a bull body closing above the middle of its range.
- The move down is in a 6-bar bear micro channel. That means strong bears.
- The bears hope that this week was simply a pullback and want a retest of the May 4 low.
- The bulls want a reversal from a double bottom (Mar 20 and May 4) and a higher low major trend reversal.
- They hope that the strong selloff from April 13 is simply a sell vacuum test of the trading range low.
- The bulls will need to create a follow-through bull bar to increase the odds of retesting the 20-week exponential moving average.
- Buy Vacuum and Sell Vacuum within a trading range can make the range extremes tests appear very strong, but the breakout is more likely to fail.
- The market is in a 26-week trading range. Traders will BLSH (Buy Low, Sell High) in trading ranges until there is a strong breakout from either direction with follow-through buying/selling.
- Poor follow-through and reversals are common within a trading range.
- For now, odds slightly favor the trading range to continue.
- Traders will see if the bears can continue the 6-bar bear micro channel. If they do, the odds of a retest of the trading range low and a breakout attempt increase.
- Or will the bulls be able to create a follow-through bull bar breaking the minor bear trend line to test near the 20-week exponential moving average?
The Daily crude oil chart
- Crude Oil traded sideways to up testing the 20-day exponential moving average. Friday was an outside bear doji.
- Last week, we said that traders will see if the bears can continue to get consecutive bear bars or will the market trade slightly lower first but stall and reverse higher beginning the bull leg within the trading range.
- The bulls hope that the current selloff is simply a sell vacuum test of the trading range low.
- They got a second leg sideways to up this week but have not yet been able to trade far above the 20-day exponential moving average.
- They want a reversal from a higher low major trend reversal.
- They will need to create consecutive bull bars closing near their highs trading far above the 20-day exponential moving average to increase the odds of the bull leg beginning.
- The bears got a strong bear leg testing the March low. The move down was in a parabolic wedge (Apr 21, Apr 28, and May 4).
- It is strong enough for traders to expect at least a small second leg sideways to down.
- They want a retest of the May 4 low followed by a strong breakout below.
- They see the pullback in the last 2 weeks simply as forming a double top bear flag (May 10 and May 19) at the 20-day exponential moving average.
- If the bulls fail to break far above the 20-day exponential moving average within the next few weeks, the odds of a retest of the trading range low increase.
- Crude Oil is in a 26-week trading range. Traders will BLSH (Buy Low, Sell High) in trading ranges until there is a strong breakout from either direction with follow-through buying/selling.
- Poor follow-through and reversals are common in trading ranges. Most breakouts from trading ranges fail.
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