- Yesterday's candlestick closed as a bear bar near its low with a prominent tail above.
- In our previous report, we said the market formed a tight trading range in the last 3-4 days (small yellow box). The market is in breakout mode. Traders will wait for a breakout from either direction and trade in the direction of the breakout.
- The market formed a breakout below the 4000 on Friday.
- The bulls want a reversal from a wedge pattern (Mar 25, Apr 9, and Apr 18) and a lower low major trend reversal.
- The problem with the bull's case is that they couldn't create bull bars with follow-through buying.
- They must create strong bull bars to show they are back in control.
- The bears want a retest of the January low.
- They want a large second leg sideways to down with the first leg being the April 2 to April 9 low.
- They got a breakout below the April 16 low on Friday. They need to create sustained follow-through selling to increase the odds of a measured move down.
- Exports for the first 15 days are up ITS: 16.95%, AmSpec: 13.55%.
- Production is slowly picking up, but not in a big way yet.
- Refineries' appetite to buy physical remains lukewarm with the recent sharp falling market.
- The market remains Always In Short.
- So far, the move down since April 1 is in a tight bear channel with strong bear bars. The selling pressure is stronger than the buying pressure (bull bars with no follow-through buying).
- Because this week closed near its low, the market may gap down next week. Small gaps usually close early.
- Traders want to see if the bears can create a follow-through bear bar to confirm the breakout below the 4000 level. If they can create follow-through selling, we may see a retest of the January low around the 3850-3800 area.
- Or will the market lack follow-through selling, and reverse back above 4000 instead?
- For now, odds slightly favor the market to trade at least a little lower.
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Related publications
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.