- Thursday’s candlestick (Jul 24) was a bull doji closing slightly below the middle of its range with a long tail above.
- In our last report, we said the odds slightly favor sideways to up. Traders would see if the bulls could create follow-through buying, breaking above the July 18 high, or if the market would stall around or below the July 18 high area and trade lower instead.
- The market broke above the July 18 high, but reversed to close off the day's high.
- The bulls want a retest of the April high.
- The current move up is in a bull channel with overlapping candlesticks. They want the bull channel to continue.
- If there is a pullback, they want it to lack follow-through selling, similar to the last few pullbacks (July 7, July 11, July 15, and July 22).
- The bulls need to create a strong breakout above the July 18 high with follow-through buying to increase the odds of a sustained move.
- The bears want a reversal from a large wedge pattern (May 15, Jun 20, and Jul 24) and a trend channel line overshoot. They want a major lower high vs the April high.
- They view the current move as a retest of the prior high (Jul 18), and want it to form a higher high and a double top with July 18.
- The problem with the bear's case is that they have not been able to create follow-through selling in the last four selloffs (July 7, July 11, July 15, and Jul 22). The bears are not as strong as they hoped for.
- They need to create consecutive bear bars closing near their lows to show they are at least temporarily back in control.
- Production for July is expected to be around the same level as June or slightly higher. August may be flat or slightly lower.
- Refineries' appetite to buy looks decent recently.
- Export: Down 3% in the first 20 days.
- So far, the buying pressure is slightly stronger than the selling pressure. The bulls have a slight edge in buying pressure, but not in an overwhelming way yet (no strong consecutive bull bars closing near their highs).
- The bears need to create strong bear bars with follow-through selling to show they are back in control.
- For now, I reckon odds slightly favor sideways to up.
- For tomorrow (Friday, July 25), traders will see if the bulls can create follow-through buying. If they can, the weekly candlestick will close near its high, which will increase the odds of next week trading at least a little higher.
- Or will the bears be able to create a strong pullback instead? If this is the case, the weekly candlestick may close with a bear body, which will create more doubts and uncertainty.
Andrew
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.