Market Overview: Crude Oil Futures
The Crude oil futures traded lower but the bears failed to get a follow-through bar and the market closed as a bull doji. The bears hope that this week was simply a pullback and want a second leg sideways to down to re-test the September low.
The bulls want a second leg sideways to up re-testing October 7 high. Bulls will likely attempt to trigger the High 2 buy signal by trading above this week’s high.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a small bull doji bar.
- Last week, we said that odds favor Crude Oil to trade at least slightly below last week’s low. Traders will see if the bears can create a follow-through bear bar or if it trades lower but reverses to close with a bull body and a long tail below instead
- The bears failed to get a follow-through bear bar, but the bulls on the other hand were not able to create a big bull body.
- 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 want at least a small second leg sideways to down retesting the September low after a pullback.
- They want a reversal lower from a double top bear flag with the August 30 or July 29 high. They got that last week.
- However, they were not able to create a follow-through bear bar this 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 see this week as a breakout test of the Sept 26 high and want at least a small second leg sideways to up re-testing October 7 high.
- Since this week’s candlestick is a bull doji bar, it is a weak buy signal bar.
- However, it followed the bear’s failure to create follow-through selling. Bulls will likely attempt to trigger the High 2 buy signal by trading above this week’s high.
- If they do, traders will see if they get a strong entry bar closing near its high and subsequent follow-through buying.
- If next week closes as a bear bar instead, the odds of a re-test of the September low increase.
- The 20-week exponential moving average and bear trend line remains resistances above.
The Daily crude oil chart
- The bears got follow-through selling early this week. Wednesday was an inside bull bar, but bulls failed to get a follow-through bull bar on Thursday.
- Friday triggered the Low 1 sell signal, but Crude Oil reversed back up to close as a doji bar.
- 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).
- The bulls see this week simply as a 2-legged pullback and a breakout test of the Sept 29 high.
- 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.
- They want at least a small second leg sideways to up re-testing October 7 high.
- If Crude Oil trades lower next week, the bulls want a double bottom with October 18 low.
- 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.
- They got a reversal lower from a double-top bear flag with August 30.
- However, the bears did not get strong follow-through selling this week.
- They hope that Thursday and Friday were simply a pullback and want another larger second leg lower to re-test Sept low.
- Since Friday was a doji bar, it is not a strong sell signal bar for Monday.
- For now, the bulls still have at least a 50% chance of at least a small second leg sideways to up to retest the Oct 7 high.
- Bulls will likely attempt to trigger the High 2 buy signal by trading above Friday’s high. Traders will see if the bulls can get a strong entry bar with subsequent follow-through buying.
- However, if instead, the bears start creating consecutive bear bars closing near their lows next week, the odds of a retest of Sept low increases.
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