16/7/25 Can Bears Create A Follow-through Bear Bar?

1. Tuesday’s candlestick (Jul 15) was a big bear bar closing in its lower half with a prominent tail below.
   
2. In our last report, we said traders would see if the bulls could create a strong breakout above the bear trend line, or if the market would trade sideways and stall around the bear trend line area (4250-70) in the next few days instead.
   
3. The market stalled at the bear trend line and reversed lower, closing below Monday's low.
   
4. The bulls got another leg up to form the wedge pattern (Jul 3, Jul 9, and Jul 14).
   
5. They want a measured move based on the first leg up (July 1 to July 3), which will take the market to around the 4260 area.
   
6. So far, the market is forming a pullback following the wedge pattern at the measured move area.
   
7. They see Tuesday as a pullback and want it to have weak follow-through selling. They want a retest of the July 14 high.
   
8. The bulls need to create a strong breakout above the bear trend line with follow-through buying to increase the odds of a sustained move.
   
9. The bears want a higher high major trend reversal and a large wedge pattern (May 15, Jun 20, and Jul 14). They want a major lower high vs the April high.
   
10. They hope the bear trend line will act as resistance. So far, this is the case.
    
11. The next target for the bears is the 20-day EMA.
    
12. They must create follow-through selling to show they are back in control.
    
13. Production for July is expected to be around the same level as June or slightly higher.
    
14. Refineries' appetite to buy so far looks decent recently. A bit quiet on Tuesday.
    
15. Export: Down 6% in the first 15 days.
    
16. So far, the market could be forming a pullback following the wedge pattern.
    
17. For now, traders will see if the bears can create follow-through selling. Or will they fail to do so again, as they did on July 7 or July 11?
    
18. For tomorrow (Wednesday, Jul 16), traders will see if the bears can create a follow-through bear bar, even if it is just a bear doji.
    
19. Or will the market trade higher to retest the July 14 high instead? If this is the case, it will indicate the bears are not yet strong.
    

Andrew