ES Weekly Plan | April 22-26, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟥 DAILY: OTFD | ENDS: 5058
🟥 WEEKLY: OTFD | ENDS: 5213
🟨 MONTHLY: BALANCE | TBD
Contextual Analysis
During the previous week, sellers managed to sustain the downside pressure as the weekly one-time framing down remained intact. Monday’s session unfolded with a triple distribution trend day to the downside, and the rest of the week stayed within and below its lower distribution, signaling a notably weak market. Consequently, sellers managed to fill the ESH24 roll gap at 5129, end the monthly one-time framing up, fill the unfilled daily gap at 4998.25, and complete the 100% range extension target in the process, closing out the week below the 5% correction level of 5056. This period of weakness serves as a great example of why it’s important to wait for the weekly to start one-time framing down, indicating a shift in tone, before attempting to fight the trend. You may not catch the absolute top, but that task is unnecessary and best left to other traders.
For this week, the main focus will be on seller’s ability to sustain the establishment of value at lower prices, following the breakdown of the 3-week balance area two weeks ago. The daily and weekly time frames are one-time framing down, while the monthly has returned to balance after the break of the March low of 5063. Observing the daily chart, we can quickly see the inability of buyers to take out a previous day's high during this weekly imbalance phase, making it their primary objective alongside a return within the previous week’s value area. Failure to do so maintains the prevailing downside pressure. The previous week’s VPOC is located at 5103, which is 100 handles above Friday's settlement. This implies a cautious approach towards chasing early weakness that fails to hold below Friday’s low.
The weekly Smashlevel (Pivot) is 5040/5063, representing the previous week’s value area low and the level that ended the monthly OTFU, coinciding with the YTD VWAP and 5% correction level. Break and hold above 5040/5063 would target a traverse of the previous week’s value area toward the resistance area from 5115 to the Weekly Extreme High of 5145, where selling activity can be expected. Take note of the Monthly Extreme Low at 5115, which adds an additional layer of confluence to the resistance area.
Holding below 5040/5063, signaling continued weakness, would target a downside continuation toward the weekly NVPOC at 4977, followed by the low volume node (LVN) at 4935, completing a full traverse of the prior 2-week balance #2. Break and hold below 4935 would target the support area from 4895 to the Weekly Extreme Low of 4865, where buying activity can be expected. Note how this support area coincides with the lower end of the prior 2-week balance #1, which was formed after the notable breakout candle on January 19th.
As usual, a detailed daily plan will be published tomorrow. In the meantime, enjoy the rest of your weekend!
Levels of Interest
In the upcoming week, I will observe 5040/5063.
Break and hold above 5040/5063 would target 5115 / 5145* / 5194 / 5247 / 5294
Holding below 5040/5063 would target 4977 / 4935 / 4895 / 4865* / 4840
*Weekly Extremes. I exercise caution when initiating trades outside the Weekly Extremes to avoid making impulsive decisions at unfavorable locations. Essentially, the Weekly Extremes serve as a safeguard against emotionally-driven trades, a state that is less than ideal for making well-informed trading decisions.
Economic Calendar
Disclaimer: Futures and options trading involves a high level of risk, with the potential for substantial losses. The information provided in this newsletter is for informational purposes only and is not intended to be a trade recommendation. It is the responsibility of the reader to make their own investment decisions and they should seek the advice of a qualified securities professional before making any investments. The owners/authors of this newsletter are not certified as registered financial professionals or investment advisers.
Thanks Smash. Looking forward to your daily plan tomorrow.
Thank you!