1/8/25 Will Weekly Candlestick Close Near Low or Long Tail Below

1. Thursday’s candlestick (Jul 31) was a bear bar closing near its low.
   
2. In our last report, we said traders would see if the bears could create a strong retest of the July 29 low, or if the market would trade slightly lower, but find support around the 20-day EMA instead.
   
3. The market traded lower and continued down in Thursday night's session, testing the 20-day EMA. The monthly candlestick closed in its upper half with a prominent tail above.
   
4. The bulls want any pullback to lack follow-through selling, similar to the last few pullbacks (July 7, July 11, July 15, and July 22).
   
5. They see the current move as a two-legged pullback.
   
6. They want the 20-day EMA or the bull trend line to act as a support level.
   
7. They want a double bottom bull flag with the July 29 low.
   
8. They want another strong leg up to form the wedge pattern, with the first two legs being Jun 20 and July 24.
   
9. The bears want a reversal from a large wedge pattern (May 15, Jun 20, and Jul 24) and an embedded wedge (Jul 14, Jul 18, and Jul 24).
   
10. They see Tuesday (July 30) as a pullback and want at least a small second leg sideways to down, retesting the July 29 low. The second leg sideways to down is underway.
    
11. Previously, the bears were unable to create follow-through selling in the last four selloff attempts (July 7, July 11, July 15, and July 22).
    
12. They need to create consecutive bear bars closing near their lows and trading below the 20-day EMA to show they are back in control.
    
13. Production for August may be flat or down.
    
14. Refineries' appetite to buy looks decent recently.
    
15. Export: Perhaps down -7% in July.
    
16. So far, the buying pressure is slightly stronger than the selling pressure, but not in an overwhelming way yet (no strong consecutive bull bars closing near their highs).
    
17. However, the move up has lasted a considerable amount of time. The market may have to form a pullback before it moves higher again. The pullback phase is still underway.
    
18. Traders will assess the strength of the pullback to determine whether it will be a minor correction or a more significant event. So far, the pullback appears to be minor.
    
19. The bears need to create follow-through selling to show they are back in control, something they couldn't do in the last few pullbacks (July 7, July 11, July 15, and Jul 22).
    
20. For tomorrow (Friday, Aug 1), traders will see if the bears create a strong follow-through bear bar closing near its low. If they do, the weekly candlestick will close near its low, which will increase the odds of next week trading at least a little lower.
    
21. Or will the market trade lower, but close with a long tail below or a bull body instead?
    

Andrew