Market Overview: Crude Oil Futures
Crude oil strong breakout below the 16-week trading range. They want a measured move down to around 57 using the height of the 16-week trading range. The bulls want a failed breakout and a reversal back into the middle of the trading range from a lower low major trend reversal and a wedge pattern (Sept 8, Dec 9 and Mar 17).
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a big bear bar closing near its low.
- Last week, we said that odds slightly favor Crude Oil to trade at least a little lower and traders will see if the bears can create a strong follow-through bear bar or will the market trade slightly lower but stall and close with a bull body or a long tail below.
- The bears got a consecutive bear bar breaking below the 16-week trading range.
- They triggered the L4 (Low 4) sell signal and got follow-through selling this week.
- They will need to continue creating strong follow-through selling to increase the odds of a measured move down to around 57 using the height of the 16-week trading range.
- The bulls want a failed breakout below the 16-week trading range.
- They hope that the tight trading range is the final flag of the move down.
- They have broken the bear trend line by trading sideways.
- They want a reversal back into the middle of the trading range from a lower low major trend reversal and a wedge pattern (Sept 8, Dec 9 and Mar 17).
- Because of the strong selloff, the bulls will need at least a strong reversal bar or a micro double bottom before they would be willing to buy more aggressively.
- Since this week is a big bear bar closing near the low, it is a weak buy signal bar for next week. It is a good sell signal bar.
- Odds slightly favor the Crude Oil to trade at least a little lower.
- Traders will see if the bears continue to get follow-through selling or will next week trades slightly lower but stalls and close with a bull body or a long tail below.
The Daily crude oil chart
- Crude Oil broke below the triangle and 16-week trading range with follow-through selling.
- Last week, we said that Crude Oil formed a triangle pattern and is in breakout mode and traders should be prepared for breakouts to fail unless there is strong follow-through price action following the breakout.
- Recently, the bears got a reversal lower from a double top bear flag (Feb 13 and Mar 7).
- They then triggered the larger L4 (Low 4) sell signal and got follow-through selling breaking far below the triangle with follow-through selling.
- They want a measured move down using the height of the 16-week trading range which will take them to around 57.
- If Crude Oil pullback higher, they want at least a small second leg sideways to down, testing March 17 low.
- The bulls want a failed breakout below the 16-week trading range.
- They have broken the bear trend line by trading sideways.
- They hope that the trading range will be the final flag of the move down and want a reversal higher from a wedge pattern (Sept 8, Dec 9 and Mar 17).
- They also hope that Thursday inside doji is a one-bar final flag of a climactic selloff with March 15 and March 16 forming a micro double bottom.
- The last 3 candlesticks have a lot of overlapping price action and prominent tails below.
- Crude Oil could be forming a trending trading range.
- Since Friday was an outside bear bar with a long tail below, it is a weaker sell signal bar.
- For now, odds slightly favor Crude Oil to get at least a small second leg sideways to down following any pullback (bounce).
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