- Thursday’s candlestick (Aug 28) was a bear bar closing in its lower half with a prominent tail below.
- In our last report, we stated that traders would observe whether the bulls could create a strong follow-through bull bar or if the market would trade lower, breaking below the August 21 low and testing the 20-day EMA instead.
- The bulls were not able to create a follow-through bull bar, and the market traded lower to test the 20-day EMA.
- They want the 20-day EMA and the bull trend line to act as support and the pullback to be weak and sideways, lacking follow-through selling, as has been the case with all recent pullbacks.
- They want it to form a higher low followed by a reversal from a double bottom bull flag (Aug 21 low).
- They need to create strong bull bars to show they are back in control.
- The bears want a reversal from a wedge pattern (June 20, July 24, and August 19), and a large double top bar flag with the February high.
- They need to create strong follow-through selling, trading below the 20-day EMA and the bear trend line to increase the odds of a sustained move.
- Production for August may be flat or down. Sept should be flat or down as well.
- Refineries' appetite to buy remains decent.
- Export: August export up 10% in the first 25 days.
- So far, the pullback phase is still holding above the 20-day EMA and is a higher low.
- The sideways to down pullback phase is still underway.
- Tomorrow's daily candlestick will determine the weekly candlestick. The bulls want a strong bull bar so that the weekly candlestick will close with a long tail below. The bears want a strong bear bar so that the weekly candlestick will close near its low, which increases the odds of the market trading at least a little lower next week.
- For tomorrow (Friday, Aug 29), traders will see if the bears can create strong follow-through selling, closing below the 20-day EMA.
- Or will the market find support at the 20-day EMA and close higher for the day instead?
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.