Market Overview: Crude Oil Futures
The weekly candlestick was an inside bull bar closing near its high; there was no Crude Oil follow-through selling. The bulls need to create follow-through buying next week to increase the odds of another leg up. The bears want a breakout below the inside bull bar.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was an inside bull bar closing near its high.
- Last week, we said that the odds slightly favor the market to still be in the sideways to down pullback phase. Traders will see if the bears can create follow-through selling.
- The bears were not able to get a follow-through bear bar.
- They want a reversal down from a large double-top bear flag with November 2022 high and a parabolic wedge (Jul 13, Aug 10, and Sept 28).
- They hope that the strong move up is simply a buy vacuum and a bull leg within a larger trading range.
- They want a strong bear leg to retest the trading range low (May low).
- While the bears got a big bear bar last week, they were not able to create follow-through selling this week.
- They will need to create consecutive bear bars closing near their lows trading far below the 20-week EMA to increase the odds of lower prices.
- Previously, the bulls have had a tight bull channel since June. That means strong bulls.
- They see the pullback last week simply as a test of the breakout point (trading range high; April high).
- They want the 20-week EMA to act as a support and a reversal up from a higher low, completing the larger wedge pattern with the first two legs being August 10 and September 28.
- At the very least, they expect at least a small sideways to up leg to retest the leg extreme high (Sept 28).
- They hope to get a measured move based on the height of the 41-week trading range, which will take them to around $103.
- Since this week was an inside bar, the market is in breakout mode. The bulls want a breakout above, while the bears want a breakout below the inside bar.
- Because it is a bull bar closing near its high, odds favor the market to break out above it first.
- Traders will see if the bulls can get a strong follow-through bull bar or will the market trade slightly higher but close with a long tail or with a bear body.
- If the bulls get a strong follow-through bull bar, the odds of a retest of the September 28 high and a breakout above increase.
- The bear trend lines becoming progressively less steep also indicates a loss of momentum for the bears.
- The market likely has flipped into Always In Long.
The Daily crude oil chart
- Crude Oil gapped higher earlier in the week (in response to the conflict in the Middle East). It then formed a small second leg sideways to down followed by a strong bull bar on Friday.
- Last week, we said that odds slightly favor the market to still be in the sideways to down pullback phase, and for a second leg lower after a pullback.
- The bulls got a strong rally from June in the form of a tight bull channel which lasted a long time.
- They hope that the strong pullback last week was simply a sell vacuum test of the breakout point (April high) and has alleviated the overbought conditions.
- They want the pullback to stall around the April high and form a higher low followed by another strong leg up, completing the larger wedge pattern with the first two legs being August 10 and September 28.
- They will need to create follow-through buying next week to increase the odds of retesting the September 28 high.
- The bears got a reversal down from a large wedge pattern (Jul 13, Aug 10, and Sept 28), a smaller wedge (Sept 5, Sept 19, and Sept 28) and a final flag.
- The move down is strong in the form of a bear spike (strong bear bars with little overlap).
- That increases the odds of at least a small second leg sideways to down after a small pullback. They got that this week.
- If the market trades higher, they want the market to stall below the September 28 high and reverse lower from a lower high major trend reversal or a double top.
- Since Friday was a big bull bar closing near its high, it is a buy signal bar for Monday.
- Odds slightly favor the market to trade at least a little higher.
- If the bulls get a couple of strong consecutive bull bars, the odds of a retest of September 28 high will increase.
- The pullback has also fulfilled the minimum requirement of TBTL (Ten Bars, Two Legs).
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
