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ES Weekly Plan | April 3-7, 2023
Below are my expectations for the week ahead.
🟩 Daily: OTFU | Ends: 4088.50
🟩 Weekly: OTFU | Ends: 3980.75
🟨 Monthly: BALANCE | 3 Month | H: 4208.50 L: 3814.50
Weekly Extreme High: 4245
Weekly Extreme Low: 4025
As usual, a detailed daily plan will be published tomorrow.
Last week, the main objective of the buyers was to put an end to the daily one time framing down, which they accomplished already on Monday. Going into Tuesday’s session, the market was in balance across all time-frames, awaiting more market-generated information. Markets are constantly shifting between balance (consolidation) and imbalance (trending) phases. Being aware of the market conditions can prevent you from taking trades at unfavorable locations. If your trading strategy focuses on identifying significant directional moves or breakout trades, trading a balanced market will get you smashed. Conversely, if your strategy involves taking responsive trades or reversals to the mean, you will get smashed during an imbalanced market. It’s crucial to identify the market conditions and adapt your strategy accordingly. On Wednesday's session, the market experienced a large true gap to the upside, which remained intact throughout the day, leading to a close above the value area of the previous five weeks. Please refer the composite profile provided below (Substack). This marked a potential starting point for an imbalanced move, resulting in traders who failed to acknowledge it going against the market for the rest of the week. On Friday, the Weekly Extreme High of 4130 from the previous plan was reached, making it an ideal location to book profits for long positions and reassess.
For this week, the main focus will be on whether buyers can spend time and volume to establish acceptance within the area of prior balance from February to migrate the short-term (5-day VPOC) value up from 4041 (currently 100 handles below Friday’s close). In early March, sellers faced a similar situation when they failed to establish acceptance after attempting to move away from value and reaching a prior area of balance, resulting in a return to value. Daily and Weekly are OTFU, while the Monthly still is in balance.
The weekly level of interest is 4115, which is the high volume node (HVN) and halfback from Friday’s session. Holding above 4115 would target 4160. Note how this level coincides with three prior weekly value resistances. Break and hold above 4160 would target the resistance area from 4210 to the Weekly Extreme High 4245, where selling activity can be expected. Note how this resistance area coincides with the prior 3-week balance high. Unfilled weekly gap at 4220.75.
Break and hold below 4115 would target 4083, which is the previous 3-week balance high. Note the HVN in close connection. Break and hold below 4083 would target the support area from 4060 to the Weekly Extreme Low 4025, where buying activity can be expected. This support area is crucial for the buyers to hold. The sellers main objective is to end the daily one time framing up.
🟩 Upside: 4160 | 4210 | 4220 | 4245 | 4300 | 4335
🟥 Downside: 4083 | 4060 | 4025 | 3990 | 3950 | 3915
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. Twitter: @smashelito | FAQ: smashelito.com