- Thursday’s candlestick (Jan. 8) was a bear doji closing below the middle of its range with a long tail above.
- In our last report, we stated that traders would watch to see if the bulls could create a strong follow-through bull bar, closing far above the 20-day EMA, or if the market would trade higher but close with a long tail above.
- The market traded higher but reversed to retest the 20-day EMA. The market closed slightly off its low.
- Bulls hope the selloff (Dec 19) will form a major higher low relative to May 2025.
- They hope to get a reversal from a large wedge pattern (Jan 17, May 8, and Dec 19) and a smaller wedge pattern (Nov 3, Nov 26, and Dec 19).
- They want a reversal from a lower low major trend reversal (relative to Nov 26) and now, a higher low major trend reversal (relative to Jan 5)
- They need to create strong consecutive bull bars trading far above the 20-day EMA to show they are back in control.
- They want the 20-EMA to act as a support level.
- The bears got the third leg down to form the wedge pattern (November 13, November 26, and December 19).
- They want a retest of the December low, even if it only forms a higher low. So far, the retest has reached a higher low (Jan 5).
- If the market trades higher, they want it to form a lower high and the market to reverse below the 20-day EMA.
- Fundamentals:
- • Production: Production for Jan - SPPOMA first 5 days -34%
- • Refineries: Buying interest is there at these low prices. Not paying premiums vs spot futures - yet.
- • Exports: ITS first 5 days +31%.
- Today (Friday, Jan. 9), bulls want a strong bull bar so the weekly candlestick will close near its high, increasing the odds of next week trading at least a little higher.
- Bears want a strong bear bar so the weekly candlestick will close with a long tail above, perhaps with a bear body too.
Andrew
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