17/7/25 Retest Jul 14 High or Weak Follow-through Buying?

1. Wednesday’s candlestick (Jul 16) was an inside bull bar closing near its high.
   
2. In our last report, we stated that traders would observe whether the bears could create a follow-through bear bar, even if it were just a bear doji, or if the market would trade higher to retest the July 14 high. If this is the case, it will indicate the bears are not yet strong.
   
3. The market is forming a retest of the July 14 high, currently a lower high.
   
4. Recently, the bulls got another leg up to form the wedge pattern (Jul 3, Jul 9, and Jul 14) and a measured move to around the 4250 area.
   
5. They see the current move as a pullback and want a retest of the July 14 high, followed by a breakout above the bar trend line.
   
6. The bulls need to create more follow-through buying to increase the odds of a sustained move.
   
7. The bears want a higher high major trend reversal and a reversal from a large wedge pattern (May 15, Jun 20, and Jul 14). They want a major lower high vs the April high.
   
8. They hope the bear trend line will act as resistance.
   
9. They see the current move as a retest of the July 14 high and want it to form a lower high.
   
10. The bears were not able to create follow-through selling today (Wednesday), which indicates they are not yet as strong as they hope to be.
    
11. They must create strong bear bars to show they are back in control.
    
12. Production for July is expected to be around the same level as June or slightly higher.
    
13. Refineries' appetite to buy looks decent recently. Slightly quieter on Tuesday and Wednesday.
    
14. Export: Down 6% in the first 15 days.
    
15. So far, the market has traded sideways in the last 7 trading days around the bear trend line area.
    
16. Wednesday was an inside bar, which means the market is in breakout mode. The bulls want a breakout above, while the bears want a breakout below the inside bar. The first breakout can fail 50% of the time.
    
17. For now, traders will see if the bulls can create follow-through buying to retest the July 14 high, or if the market continues to trade sideways within the small trading range.
    
18. For tomorrow (Thursday, Jul 17), traders will see if the bulls can create a follow-through bull bar testing the July 14 high.
    
19. Or will the market form a lower high (versus July 14) and be followed by some selling pressure instead?
    

Andrew