11/6/26 Close Below 20-day EMA, Bears Need FT Selling

1. Tuesday’s candlestick (Jun 10) was a decent-sized bear closing near its low and below the 20-day EMA.
   
2. In our last report, we said traders would see if the bears can maintain the candlestick as a bear bar, or if the bulls could create a reversal to close the day as an outside bull bar.
   
3. The market opened higher in the morning but there was no follow-through buying. The market sold off persistently for the day.
   
4. The bears want a reversal from a wedge bear flag (April 25, May 14, and Jun 3) and a double top bear flag (May 14 and Jun 3). They see another smaller wedge bear flag (May 29, Jun 3, and Jun 9).
   
5. They must create strong bear bars trading below the 20-day EMA to increase the odds of another strong leg down.
   
6. Since today's candlestick closed below the 20-day EMA, they need to create a follow-through bear bar to increase the odds of the leg resuming, something they couldn't do on May 30.
   
7. The bulls want a reversal from a wedge bull flag (May 16, May 26, and Jun 11). They see the market creating a double bottom bull flag (May 30 and Jun 11).
   
8. They want the 20-day EMA or the May 30 low area to act as support. They want the market to reverse above the 20-day EMA.
   
9. Production for June should be more or less around May's level.
   
10. Refineries' appetite to buy so far looks decent.
    
11. Export: Looks strong in the first 10 days +25-30%
    
12. For tomorrow (Wednesday, June 11), traders will see if the bears can create a follow-through bear bar.
    
13. Or will the bulls be able to create a bull bar closing above the 20-day EMA?
    
14. The market has been in a tight range in the last 10 days. Traders could Buy Low, and Sell High within the trading range until there is a strong breakout from either direction.
    

Andrew