22/7/25 Can Bears Finally Create Follow-through Selling?

1. Monday’s candlestick (Jul 21) was a big inside 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 follow-through buying, or if the follow-through buying over the next 1-2 days would be limited. If this is the case, it can indicate that the bulls are not as strong as they had hoped.
   
3. The market sold off, reversing a big portion of Friday's rally. The bulls did not get follow-through buying.
   
4. Previously, the bulls got another leg up to form the wedge pattern (Jul 3, Jul 9, and Jul 18).
   
5. They want a retest of the April high.
   
6. They see the pullback on Monday (Jul 21) as a retest of the breakout point (bear trend line).
   
7. They want the move to lack follow-through selling, like on July 7, July 11, and July 15.
   
8. The bulls need to create sustained follow-through buying following the breakout above the bear trend line to increase the odds of a sustained move.
   
9. The bears want a reversal from a large wedge pattern (May 15, Jun 20, and Jul 18) and a trend channel line overshoot. They want a major lower high vs the April high.
   
10. They hope that the recent 8-day small trading range will be the final flag of the move.
    
11. They want the market to reverse below the bear trend line and the July 14 high within 5 trading days.
    
12. If the market trades higher, they want it to form a lower high to July 18.
    
13. They must create follow-through selling to show they are back in control, something they were unable to do in the last three selloffs (July 7, July 11, and July 15).
    
14. Production for July is expected to be around the same level as June or slightly higher. August may be flat or slightly lower.
    
15. Refineries' appetite to buy looks decent recently.
    
16. Export: Down 3% in the first 20 days.
    
17. Traders will be looking to see if the bears can create follow-through selling, something they were unable to do in the last pullback attempts (July 7, July 11, and July 15).
    
18. For tomorrow (Tuesday, Jul 22), traders will see if the bears can create follow-through selling.
    
19. Or will the market trade higher and retest the July 18 high instead? If this is the case, it will indicate that the bears are not as strong as they had hoped.
    

Andrew