Market Overview: Crude Oil Futures
There was no weekly Crude Oil follow-through selling, closing as an inside bull bar near its high. The bulls want a reversal from a double bottom bull flag (Oct 1 and Oct 18). They must create consecutive bull bars closing near their highs to increase the odds of a retest of the October 8 high. The bears see this week simply as a pullback and want at least a small second leg sideways to down to retest the October 18 low.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was an inside bull bar closing in its upper half.
- Last week, we said that the market may trade slightly lower. Traders will see if the bears can create a follow-through bear bar or if the market will trade slightly lower but close with a long tail or a bull body instead.
- The bulls saw the recent move as a deep pullback and want another leg up to complete the wedge pattern (the first two legs are September 24 and October 8).
- They want a reversal from a double bottom bull flag (Oct 1 and Oct 18).
- The bulls must create consecutive bull bars closing near their highs to increase the odds of a retest of the October 8 high.
- The bears got a reversal from a lower high and a double top bear flag (Aug 12 and Oct 8).
- However, they were not able to create a follow-through bear bar this week.
- They see this week simply as a pullback and want at least a small second leg sideways to down to retest the October 18 low.
- They want the 20-week EMA to act as resistance.
- Since this week’s candlestick is an inside bull bar closing near its high, the market is in breakout mode.
- Odds favor the first breakout to be above this week’s high.
- Traders will see if the bulls can create another follow-through bull bar closing above the 20-week EMA or if the market will trade slightly higher but close with a long tail or a bear body instead.
- The market is trading around the middle of the trading range which is an area of balance.
- The overlapping candlesticks, poor follow-through and frequent reversals are the hallmarks of trading range price action.
- 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.
- The ongoing / escalating conflict in the Middle East can keep energy prices volatile.
The Daily crude oil chart
- The market formed a pullback to the 20-day EMA early in the week. Thursday traded higher but reversed into an outside bar bar. There was no follow-through selling on Friday.
- Last week, we said that the market continues to be in a large trading range. Traders would see if the bears could continue to create bear bars to retest the September 10 low or if the bulls can create a reversal to retest the October 8 high from a higher low instead.
- The bears got a reversal from a double top bear flag (Aug 12 and Oct 8) and want a retest of the prior leg low (Sep 10), even if it forms a higher low.
- They see this week simply as a two-legged pullback and want at least a small second leg sideways to down to retest the recent leg low (Oct 18).
- If the market trades higher, they want another lower high and a reversal from a double top bear flag with the October 10 high.
- The bulls see the current move as a deep pullback. They want a reversal from a double bottom bull flag (Oct 1 and Oct 18) and a higher low major trend reversal.
- They want another leg up completing the wedge pattern with the first two legs being September 24 and October 8 highs.
- The bulls must create consecutive bull bars closing near their highs, trading above the 20-day EMA to increase the odds of a retest of the October 8 high.
- So far, the last 9 candlesticks have a lot of overlapping ranges which indicates tight trading ranges.
- The market is in a large trading range.
- Traders will see if the bears can create another leg down to retest the October 18 low.
- Or will the bulls be able to create another leg up to retest the Oct 10 or Oct 8 area instead?
- Poor follow-through and reversals are hallmarks of a trading range.
- The middle of the trading range can be an area of balance.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
- The ongoing / escalating conflict in the Middle East can keep energy prices volatile.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
