Market Overview: Crude Oil Futures
The market formed a weekly Crude Oil trading range around the middle of the large trading range. The bears hope this week was simply a pullback and want another retest of the August 5 low. The bulls want a reversal from a double bottom bull flag (Jun 4 and Aug 5), a wedge (Jun 4, Aug 5, and Aug 21), and a higher low.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bear doji with a long tail below.
- Last week, we said that the market is trading around the middle of the large trading range which is an area of balance. Traders will see if the bears can create a strong entry bar or if the market would retest the August 12 high instead.
- The market traded lower in the first half of the week but reversed to close in its upper half with a long tail below. The bears did not get a strong entry bar.
- Previously, the bears created a reversal from a lower high major trend reversal from around the top of the large triangle pattern.
- They want at least a small second leg sideways to down to retest the recent leg low (Aug 5). They got that this week.
- The long tail below this week’s candlestick indicates that the bears are not as strong as hoped.
- They hope this week was simply a pullback and want another retest of the August 5 low.
- The bulls see the move this week simply as a retest of the prior low (August 5).
- They want a reversal from a double bottom bull flag (Jun 4 and Aug 5), a wedge (Jun 4, Aug 5, and Aug 21), and a higher low.
- They want a retest of the recent high (Aug 12).
- Since this week’s candlestick is a bear doji with a long tail below, it is a weak sell signal bar for next week. Because it closed in the upper half of its range, it can be a buy signal bar for next week.
- The market is trading around the middle of the large trading range which is an area of balance and has been acting as a magnet.
- The two consecutive doji(s) and sideways overlapping candlesticks (in the last 5 weeks) indicate trading range price action.
- Poor follow-through and reversals are hallmarks of a trading range.
- The odds for the bulls and the bears are quite equal.
- For now, traders will see if the bulls can create a strong entry bar closing above the 20-week EMA.
- Or will the market trade slightly higher (perhaps early next week) but stall and reverse back below the 20-week EMA?
- 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.
- Side note: The ongoing turmoil in the Middle East can cause volatility in energy prices.
The Daily crude oil chart
- The market traded lower in the first half of the week but reversed higher from Thursday onwards to close around the middle of the trading range.
- Last week, we said that the middle of the trading range is an area of balance and a magnet. Traders will see if the bulls can create a small sideways to up leg to retest the August 12 high or if the market would continue to stall and form a strong bear leg to retest the August 5 low.
- The bulls see this week simply as a retest of the prior low (August 5).
- They want a reversal from a double bottom bull flag (Jun 4 and Aug 5), a wedge (Jun 4, Aug 5, and Aug 21), and a higher low.
- They hope to get a retest of the Aug 12 high followed by a breakout testing the triangle top.
- The bears got a retest of the August 5 low from a double top bear flag (Aug 1 and Aug 12) and a lower high.
- The market tested the bottom of the triangle but lacked follow-through selling. The bears are not yet as strong as they hoped to be.
- If the market trades higher, they want a reversal from a double top bear flag with the August 12 high.
- So far, the market continues to trade around the middle of the trading range which is an area of balance and a magnet.
- The odds for the bulls and the bears are quite equal.
- Traders will see if the bulls can create a small sideways to up leg to retest the August 12 high (perhaps early next week) with follow-through buying.
- Or will the market trade slightly higher but stall and reverse lower?
- Poor follow-through and reversals are hallmarks of a trading range.
- Side note: The ongoing turmoil 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.
