2/12/25 Can Bulls Create A Strong PB, or Retest Nov Low?

1. Monday’s candlestick (Dec 1) was a bear bar closing near its low with a long tail above.
   
2. In our previous report, we stated that bulls wanted the candlestick to close near its high, so the weekly candlestick would close as a strong bull bar. This was the case.
   
3. The market traded slightly higher but reversed lower towards the evening.
   
4. The bulls hope the current decline will form a major higher low.
   
5. They hope the recent tight trading range will be the final flag of the move and want the market to reverse back into the tight trading range.
   
6. At the least, they hope for a small pullback to the 20-day EMA. This move is underway.
   
7. The market reached the tight trading range yesterday (Dec 1) and near the 20-EMA, followed by a small pullback lower.
   
8. The bulls hope to get a reversal from a large wedge pattern (Jan 17, May 8, and Nov 26).
   
9. They hope the current pullback will be minor, followed by a reversal above the 20-day EMA.
   
10. They must produce strong consecutive bull bars to show they are clearly in control.
    
11. The bears want the 20-day EMA to act as a resistance level, followed by a retest of the November low.
    
12. They hope to get a third leg sideways to down to form the wedge pattern with the first two legs being Nov 13 and Nov 26.
    
13. Fundamentals
    
14. • Production: SPPOMA down 2% in November. Production may be down in December.
    
15. • Refineries: Buying interest is still there at these low prices. Not paying premiums vs spot futures.
    
16. • Exports: ITS said exports are down -19.68% in November.
    
17. The market sold off in a tight bear channel, followed by a tight trading range in October, which could be a possible final flag, followed by a second leg sideways to down.
    
18. The selloff was also climactic and slightly oversold. There could be a minor pullback towards the 20-day EMA. The market tested near the 20-day EMA yesterday.
    
19. Today (Tuesday, Dec. 2), traders will see if the bulls can create a retest and close above the 20-day EMA, or will the bears create a strong retest of the November low instead.
    

Andrew