Market Overview: Crude Oil Futures
The Crude oil futures triggered the High 2 buy signal from a higher low major trend reversal (Oct 18). Bulls need a strong follow-through bar trading far above the 20-week exponential moving average and the bear trend line to increase the odds of higher prices.
Bears hope that this is simply a 2-legged sideways to up pullback and want a reversal lower from a double top bear flag with Oct 17 high or the Aug 30 high.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bull bar with prominent tails above and below. It closed above last week’s high.
- Last week, we said that the bulls will likely attempt to trigger the High 2 buy signal and traders will see if they get a strong entry bar closing near its high and subsequent follow-through buying.
- While the move down since June was in a tight bear channel, the candlesticks had a lot of overlapping price action. The bears are not yet as strong as they could have been.
- The bears hope that the current move is simply a 2-legged sideways to up pullback and want a retest of the September low.
- They want a reversal lower from a double top bear flag with the October 7 or August 30 high or around the 20-week exponential moving average.
- They want next week to close with a bear body even though Crude Oil may trade slightly higher first.
- This week’s candlestick is a bull bar, it is a weak sell signal bar for next week.
- Bulls want a reversal higher from a wedge bull flag (June 22, July 14 and Sept 26) and a lower low major trend reversal.
- The bulls will need to create consecutive bull bars closing near their highs breaking far above the bear trend line, and the 20-week exponential moving average, to convince traders that the correction may be over.
- The bulls triggered the High 2 buy signal this week. Next week, they will need to create a follow-through bull bar to increase the odds of higher prices.
- The second leg sideways to up re-testing October 7 high is currently underway.
- The 20-week exponential moving average and bear trend line remains resistances above.
- Since this week is a bull bar closing above the middle of the bar, it is a buy signal bar for next week. The prominent tail above indicates the bulls are not yet strong.
- Odds slightly favor sideways to up. Traders will see if the bulls get follow-through buying.
- If next week trades higher but reverses to a bear bar closing near its low from a double top bear flag, the odds of a re-test of the September low increase.
The Daily crude oil chart
- Crude Oil traded sideways early in the week. It then moved higher from Wednesday and Thursday triggering the High 2 buy signal with some follow-through buying.
- Friday pulled back slightly to close as a small bear bar with a prominent tail below.
- Last week, we said that the bulls will likely attempt to trigger the High 2 buy signal and traders will see if the bulls can get a strong entry bar with subsequent follow-through buying.
- The bulls want a reversal higher from a wedge pattern (June 22, July 14 and Sept 26) and a higher low major trend reversal (Oct 18).
- In early October, the bulls created consecutive bull bars closing near their highs breaking far above the resistances. This was the strongest spike up since the selloff in June.
- The bulls want at least a small second leg sideways to up re-testing October 7 high. It is currently underway.
- They see Friday’s small bear bar simply as a small pullback and want at least another small leg up.
- While the move down since June was in a tight bear channel, there was a lot of overlapping price action.
- That means the bears are not yet as strong as they could have been.
- In October, they got a reversal lower from a double-top bear flag with August 30.
- However, the bears did not get strong follow-through selling.
- They hope that the current move is simply a 2-legged sideways to up pullback and want a re-test of the Sept low from a double top bear flag with the October 7 or August 30 high.
- Since Friday was a small bear bar with a prominent tail, it is not a strong sell signal bar for Monday.
- Odds slightly favor Crude Oil to trade at least a little higher.
- Bulls will need to create consecutive bull bars closing near their highs breaking far above the October 7 high and the bear trend line to increase the odds of higher prices.
- If instead, Crude oil stalls around the bear trend line or around the October 7 high and reverses lower, the odds of a retest of Sept low increases.
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