4/12/25 Can Bears Create Strong Retest of Nov 26 Low?

1. Wednesday’s candlestick (Dec. 3) was a bear doji closing near its low with a long tail above.
   
2. In our previous report, we stated that traders would watch if the bulls could create follow-through buying, or if the market would trade slightly higher but close with a long tail above, closing below the 20-day EMA.
   
3. The market traded higher in the morning session but pulled back down to close near the 20-day EMA. FCPO is currently trading below the 20-day EMA following the session last night.
   
4. The bulls hope the current decline will form a major higher low.
   
5. They hope the recent tight trading range (in Nov) will be the final flag of the move and want the market to reverse back into the tight trading range and the 20-day EMA. The market is here now.
   
6. The bulls hope to get a reversal from a large wedge pattern (Jan 17, May 8, and Nov 26).
   
7. They see any pullback simply as a retest of the November 26 low, and want it to be weak (overlapping candlesticks, poor follow-through selling), forming a higher low major trend reversal.
   
8. They must produce strong follow-through buying above the 20-day EMA to show they are clearly in control.
   
9. The bears want the 20-day EMA to act as a resistance level, followed by a retest of the November low.
   
10. If the market trades higher, they want the November 19 high to act as resistance (around 4250-4300 area)
    
11. They hope to get a third leg down to form the wedge pattern, with the first two legs being Nov 13 and Nov 26.
    
12. Fundamentals
    
13. • Production: Production may be down in December.
    
14. • Refineries: Buying interest is there at these low prices. Not paying premiums vs spot futures.
    
15. • Exports: ITS said exports are down -19.68% in November.
    
16. The market sold off in a tight bear channel, followed by a tight trading range in November, which could be a possible final flag, followed by a second leg sideways to down (Nov 26).
    
17. The market formed a pullback towards the 20-day EMA this week.
    
18. Next, traders will see the strength of the retest of the November 26 low. Will it be strong, breaking below the Nov 26 low? Or will it be weak, perhaps stalling around the December 2 low area?
    
19. Today (Thursday, Dec. 4), traders will watch if the bears can create follow-through selling and close far below the 20-day EMA, or will the market trade slightly lower, but close with a long tail below and above the middle of the candlestick?
    

Andrew