Market Overview: Crude Oil Futures
The weekly chart formed a Crude Oil two-legged pullback, closing below the 20-week EMA. The bears need to create follow-through selling below the 20-week EMA to increase the odds of a reversal lower. The bulls want a reversal up from a double bottom bull flag (Oct 6 and Nov 3).
Crude oil futures
The Monthly crude oil chart
- The October monthly Crude Oil candlestick was a bear bar closing near its low and below September low.
- Previously, the bulls got a reversal up from a wedge bull flag (Dec 9, Mar 20, and May 4) and a double bottom (Mar 20 and May 4), testing the November 2022 high.
- The move-up was in a tight bull channel and a 5-bar bull microchannel. The streak ended in October.
- There may be buyers below the first pullback below such a strong bull microchannel.
- The bulls see the current pullback simply as a breakout test of the April high (breakout point).
- If the market trades lower, they want the 20-month EMA or the bull trend line to act as support.
- The bears hope to get a reversal from a double top bear flag with the November 2022 high.
- They see the market as forming a larger trading range and want a reversal down from a lower high major trend reversal.
- They need to create follow-through selling in November, preferably closing below the 20-month EMA to increase the odds of lower prices.
- Since October was a bear bar closing near its low, it is a sell signal bar for November.
- For now, odds slightly favor November to trade at least a little lower.
- Traders will see if the bears can get a follow-through bear bar or will November trade slightly lower but stall and close with a long tail below or with a bull body?
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bear bar closing near its low and below the 20-week EMA.
- Last week, we said that traders will see if the bears can create follow-through selling or if will they fail to do so like the first leg down (Oct 6).
- The bears manage to get follow-through selling and a larger second leg sideways to down.
- They want a reversal from a larger double top bear flag (Nov 17, 2022, and Sept 28) and a lower high major trend reversal (Oct 23).
- They hope that the strong move up (from Jun to Sept) was simply a buy vacuum and a bull leg within a larger trading range.
- Since this week closed below the 20-week EMA, the bears will need to create a follow-through bear bar to increase the odds of lower prices.
- Previously, the bulls had a tight bull channel from June to September.
- They see the current move as a two-legged pullback, forming a double bottom bull flag (Oct 6 and Nov 3).
- They want the 20-week EMA to act as support, followed by a reversal to retest the September high.
- 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’s candlestick is a bear bar closing near its low, it is a sell signal bar for next week.
- Odds slightly favor the market to trade at least a little lower.
- Traders will see if the bears can create a follow-through bear bar or will the bulls be able to get a reversal closing back above the 20-week EMA.
- For now, while the market can still trade sideways to down for a while more, odds slightly favor the current pullback to be minor.
- However, if the bears get a couple of strong consecutive bear bars, it will swing the odds in favor of the bear leg beginning.
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