• 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 8 minutes The Coal Industry May Never Recover From The Pandemic
  • 11 minutes China Raids Bank and Investor Accounts
  • 31 mins In a Nutshell...
  • 9 hours Why Wind is pitiful for most regions on earth
  • 5 hours During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 3 mins Sources confirm Trump to sign two new Executive orders.
  • 2 days Putin Paid Militants to Kill US Troops
  • 2 days Joe Biden to black radio host, " If you don't vote for me you ain't black". That's our Democratic Party nominee ?
  • 3 days Happy 4th of July!
  • 3 days Putin Forever: Russians Given Money As Vote That Could Extend Putin's Rule Draws To A Close
  • 3 days Tesla Model 3 police cars pay for themselves faster than expected, says police chief
  • 3 days Victor Davis Hansen on Biden's mental acuity " . . unfit to serve". With 1 out of 5 Democrats admitting it. How many Dem's believe it but will not admit it?
  • 16 hours Coronavirus hype biggest political hoax in history
  • 3 days Apology Accepted!
  • 4 days The Political Genius of Donald Trump
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Watch Out For The Bear Trap As Markets Become Oversold

Sellers continued to pound the September Crude Oil futures contract this week as support failed at two key retracement levels. The current downside momentum suggests the market could be headed lower, however, we expect the selling to subside a little as the market approaches a former bottom and change in trend point.

Due to the steepness of the current break, we have to be aware of oversold conditions. Some traders use oscillators and indicators to identify this condition, however, I prefer to use the closing price reversal bottom.

This chart pattern can form on an intraday chart, a daily chart or a weekly chart. It is basically defined as a lower-low than the previous time period, a higher close, a close above the opening price for that time period and a close above the mid-point of that time period’s range. There is no math. It’s all price action and order flow.

The chart pattern doesn’t indicate a change in trend is taking place, but actually a shift in momentum. It is often accompanied by a huge volume spike because when it occurs, buyers will be willing to pay anything to get out of their short positions.

The closing price reversal chart pattern also means the buying is greater than the selling at current price levels. After it forms and is confirmed with a follow-through move, it could lead to a 2 to 3 week correction into a short-term retracement area or resistance zone.

(Click to enlarge)

Technically, the…




Oilprice - The No. 1 Source for Oil & Energy News