Fork Candles -
Part 1.
Japanese candlestick charts can be very illuminating, especially on a high degree scale and we’re going to start by looking at commodities, and crude oil.
The chart above shows quarterly Japanese candlesticks for the West Texas Intermediate NYMEX front-month crude oil futures contract. Quarter three this year produced what is known as a
Hanging man candle and this quarter is sporting a magnificently titled
Long-legged Doji. This pattern happens when there is a big range during the quarter but the open and close are the same, or very similar, and occur near the middle of the range. Coming after a trend, it can be a sign of trend exhaustion and reversal. Notice also that it is occurring at the 2018 highs.
Interestingly, EWI’s Elliott wave count is currently pointing towards a potential decline in crude oil as well.
Chances are, therefore, that it’s on a slippery slope as we enter 2022.
