Market Overview: Crude Oil Futures
The market formed a weekly Crude Oil bull leg in the form of a 5-bar bull micro channel. The bulls want a retest of the July 5 high and hope to get a strong breakout above the triangle pattern. The bears want a reversal from a lower high major trend reversal, a double top bear flag (Apr 12 and Jul 5) and from around the top of the large triangle pattern.
Crude oil futures
The Weekly crude oil chart
![Weekly Crude Oil Bull Leg 1 Crude Oil Weekly: PB Following 5-Bar Bull MC & MC Wedge, Weekly Crude Oil Bull Leg](https://www.brookstradingcourse.com/wp-content/uploads/2024/07/Crude-Oil-Weekly-PB-Following-5-Bar-Bull-MC-MC-Wedge-680x383.jpg)
- This week’s candlestick on the weekly Crude Oil chart was a bear bar closing around the middle of its range with a long tail below.
- Last week, we said that odds slightly favor any pullback to be minor followed by a retest of the current leg extreme high (Jul 5).
- The market formed a pullback trading below last week’s low but reversed higher from midweek onward to close off its low.
- Previously, the bulls managed to create a breakout and follow-through buying trading above the 20-week EMA and the bear trend line.
- They had a 5-bar bull microchannel which means persistent buying.
- There may be buyers below the first pullback from such a strong bull microchannel.
- The next target for the bulls is the April 12 high.
- They hope to get a strong breakout above the triangle pattern.
- If there is a deeper pullback, the bulls want the 20-week EMA to act as support.
- The bears see the current move as a retest of the prior high (Apr 12).
- They want a reversal from a lower high major trend reversal, a double top bear flag (Apr 12 and Jul 5) and from around the top of the large triangle pattern.
- They need to create a follow-through bear bar next week to increase the odds of a deeper pullback.
- If the market trades higher, the bears want the market to stall around the July 5 high and form a micro double top.
- Since this week’s candlestick is a bear bar closing around the middle of its range, it is a sell signal bar albeit weak (long tail below).
- There may be buyers below the first pullback from such a strong bull microchannel.
- Traders will see if the bulls can create a retest of the July 5 high and a strong breakout above the triangle with follow-through buying. If they do, the odds of a retest of the September high will increase.
- Or will the bears be able to create a follow-through bear bar and a pullback towards the middle of the trading range (20-week EMA area)?
- The middle of the large trading range is an area of balance and can be a magnet.
- The market is in a large trading range (Trading range high: September 29, Trading range low: May 4).
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
- Poor follow-through and reversals are hallmarks of a trading range.
- Sidenote: The prospect of a broadening war in the Middle East can cause volatility in energy prices.
The Daily crude oil chart
![Weekly Crude Oil Bull Leg 2 Crude Oil Daily: Strong Bull Leg, LH MTR, DT Bear Flag](https://www.brookstradingcourse.com/wp-content/uploads/2024/07/Crude-Oil-Daily-Strong-Bull-Leg-LH-MTR-DT-Bear-Flag-680x383.jpg)
- The market traded lower early in the week but reversed higher from midweek onwards. Friday traded higher but reversed into a bear bar closing near its low.
- Last week, we said if a pullback begins, traders will see the strength of the pullback. If it is weak and shallow, and holding above the 20-day EMA, the odds of a retest of the current leg extreme (Jul 5 high) will increase.
- The market formed a retest of the July 5 high on Friday but it was a lower high.
- The bulls got a strong breakout trading far above the bear trend line, testing the triangle top.
- The move since June 4 is in a tight bull channel. That means persistent buying.
- The odds favor at least a small second leg sideways to up after a pullback. So far, the second leg sideways to up (this week) is not as strong as the Bulls hope it would be.
- If there is a deeper pullback, the bulls want the 20-day EMA to act as support.
- They want another retest of the July 5 high followed by a breakout with follow-through buying.
- The bulls need to create a breakout above the triangle and the April high with follow-through buying to increase the odds of a retest of the September high.
- The bear sees the current move as a buy vacuum and a bull leg within a trading range, testing the prior high (April 12).
- They want the market to stall around the current levels (around the top of the triangle) followed by a retest of the June 4 low.
- They want a reversal from a double top bear flag (Apr 12 and Jul 5) and a lower high major trend reversal (against the April high)
- They also see a micro double top (Jul 2 and Jul 5) and a smaller lower high major trend reversal (Jul 5 and Jul 12).
- They need to create consecutive bear bars closing near their lows and trading below the 20-day EMA to indicate they are back in control.
- So far, the rally from June 4 is in a tight bull channel with stronger bull bars compared with bear bars that lacked sustained follow-through selling.
- Because the sideways-to-down pullback has just begun, the market may still be in the pullback phase early next week.
- Traders will see the strength of the pullback. If it is weak and shallow, and holding above the 20-day EMA, the odds of a retest of the current leg extreme (Jul 5 high) and subsequent breakout attempt will increase.
- For now, the odds slightly favor the current pullback to be minor.
- The market is trading in the upper third of the trading range which can be the sell zone of trading range traders.
- The top of the triangle can be a potential resistance area.
- Poor follow-through and reversals are hallmarks of a trading range.
- Sidenote: The prospect of a broadening war in the Middle East can cause volatility in energy prices.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
Hi Andrew, thank you for these updates.
I am a new trader and a new member and am trying to resolve a discrepancy between my chart and yours.
The pricing reflected seems to be significantly different. For example your weekly chart shows price to be touching the lower trendline at three points 6/4, 1/3 and 12/13 and closely following that trendline – but my chart shows the lower trendline only touching at 2 points 12/11 ( on my TOS chart, which seems to use the Monday data rather than the Friday data that your settings seem to reflect) and 6/3 aside from those dates price shows an upswing but is nowhere near the trendline.
I have used your chart scale of 10 units and I have changed the price settings to show both the extended hours and market open aggregated pricing and the trend still does not look the same would you be able to offer any clarity on why that might be please? It seems a significant enough discrepancy to alter the analysis of the PA.
Dear Geraldine,
Thanks for going through the report. Let me get some answers for you.
It would also be helpful if you can post your chart and upload it here after https://snipboard.io/ too
1) If you have the impression that the market came down to test the trendline, and then found support there, and then like magic, reversed up – I assure you this is not the case..
If you look at earlier reports, maybe, like this one, https://www.brookstradingcourse.com/analysis/crude-oil-pullback-2/ – or others, I had the trendline drawn much steeper..
But as price broke lower, I adjusted the trendline flatter according to the new point 6/4 AFTER the market has turned up.
That means the current bull trend line you see was drawn after the market has made that low..
Yes, a lot of the time, Trendline does work well like that and price bounce off it like a self fulfilling prophecy.. but not in this case..
2) The market was forming a wedge at 6/4, was pushing away below the middle of the trading range (which is a magnet and price might go back to the middle of the trading range again which it did on 6/12), and 6/4 was testing the lower third of the trading range which might have trading range buyers..
We want the trendline there to show the large contracting triangle forming.. series of lower highs and higher lows.. and the general area where price may find support once it get there moving forward..
3) Look at the latest daily chart trendline above.. I only connected the 12/13 and 6/4 because they contain all the candlesticks the best.. It does show the general area where we should be looking at should price test there again in the future..
Sorry I might have digress a bit.. just realized I may have type too long which I hope will provide some answers..
Let me know if that clarifies..
Have a blessed week ahead..
Best Regards,
Andrew