ES Weekly Plan | April 29 - May 3, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 5104.50
🟥 WEEKLY: OTFD | ENDS: 5146.50
🟨 MONTHLY: BALANCE | TBD
Contextual Analysis
During the previous week, buyers already managed to end the daily one-time framing down on Monday, triggering early-week short-covering. By Wednesday, the market tested the weekly resistance area ranging from 5115 to 5145, where selling activity was observed. However, the subsequent drop failed to gain meaningful traction below the prior week’s value area, leading to another round of short-covering. Friday’s session saw a breakout from the 8-day balance area, forming a P-shaped profile after a gap higher. Notably, the breakout was sloppy, and the upside was capped by the Weekly Extreme High of 5145 (HOD: 5146.50). Always keep the weekly targets close at hand to avoid making emotional trades at potentially poor locations.
For this week, the main focus will be on last week’s inside week, with a particular emphasis on its upper end following Friday's breakout and close above the 8-day balance area. The key question is whether last week's bounce was driven by short-covering, allowing stronger sellers to reload for another leg to the downside, or if the recent weakness is what buyers needed to clean up the unfinished business at the all-time highs. Buyers are aiming for a breakout from the inside week, which would mark an end to the weekly one-time framing down and target the high volume node at 5250. Conversely, sellers aim to return within the 8-day balance area, potentially triggering a move toward the lower end of this range. Additionally, the triple distribution trend day observed on 4/15 remains intact despite the bounce last week, with its middle distribution coinciding with the Monthly VWAP, MA20, and MA50.
The weekly Smashlevel (Pivot) is 5125, representing the prior 8-day balance high. Holding above 5125, indicating a successful breakout, would target the poor structure from 4/15 toward 5155, coinciding with Monthly VWAP, MA20 and MA50. Break and hold above 5155, indicating an inside week breakout, would target the prior 3-week balance low of 5194, as well as the resistance area from 5220 to the Weekly Extreme High of 5250, where selling activity can be expected. Take note of the medium-term value (20D VPOC) slightly above at 5254.
Break and hold below 5125, indicating a failed breakout, would target the unfilled daily gap at 5090.75, Break and hold below 5090.75 would target the support area from 5040 to the Weekly Extreme Low of 5010, where buying activity can be expected. Note how this support area coincides with the lower end of the inside week—a crucial area for buyers to hold.
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 5125.
Holding above 5125 would target 5155 / 5194 / 5220 / 5250* / 5294
Break and hold below 5125 would target 5090 / 5040 / 5010* / 4977 / 4935
*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.
Outstanding as always. Thank you so much for the thoughtful and thorough analysis. Don't day trade without it!!
Thanks Smash. Upcoming week will be very telling from either participant.