Welcome to this week’s plan. Inside, you’ll find a quick review of last week’s price action, key economic events, market structure, context for the week ahead, and the levels I’ll be focusing on. Let’s get prepared.
Contents
Last Week in Review & Thoughts on NQ
Economic & Earnings Calendar
Market Structure
Contextual Analysis & Plan
Key Levels of Interest
Last Week in Review
Last week’s plan:
Last week kicked off with a sustained true gap higher on Monday (7541), reclaiming the initial weekly upside target at 7556 in the process. A multi-distribution trend day developed as the market reached the weekly resistance area between 7635 and the Weekly Extreme High at 7665, with the ATH at 7648 marking the high of the prior multi-week balance.
On Tuesday, another true gap higher was established, with the market gapping above the ATH at 7648 and aggressively pushing through the Weekly Extreme High at 7665. Trading beyond the Weekly Extremes typically involves highly emotional price action, which Tuesday’s session definitely reflected, with 7 sets of single prints. When markets become emotional, in either direction, there’s not shame in stepping back and letting other traders handle the price discovery process.
Heading into Wednesday, the market had obviously moved significantly away from the 7665 level, with Tuesday’s close at 7765, while also trading 300 handles above both the 5D and 20D VPOCs. It’s very unappealing to chase after such moves, creating an environment that can be tricky to trade because shorting is not an optimal approach. It’s easy to get caught in FOMO and initiate trades at very poor locations, while the auction often slows down significantly after such a large directional move as it pauses to digest the move. That’s why my only advice was to mind your step and keep a level-to-level mindset.
Wednesday’s session attempted a third consecutive true gap higher, but ultimately failed, which was not a huge surprise given the context. The market essentially went nowhere directionally for the rest of the week, consolidating and digesting the move. In the context of the multi-week balance breakout, this consolidation remains bullish until proven otherwise.
Weekly Levels in Review
Daily Levels in Review
A quick note on NQ: following the failure to hold below the HTF level at 27930, a sharp counter-auction unfolded. However, the relative weakness in NQ remains evident, as the market is still nowhere near a breakout from its multi-week balance area. In the short term, I would focus on the daily balance area, with 30030 and 29390 serving as the key levels (see Figure 1). A break and hold beyond either level would target the corresponding weekly balance extreme.
Economic & Earnings Calendar
Eastern Standard Time
Earnings Whispers
Market Structure
🟨 Daily: BALANCE | 3D | High: 7820.25 / Low: 7724.25
🟩 Weekly: OTFU | Ends at: 7542.75
🟩 Monthly: OTFU | Ends at: 7345.75
Balance: A market condition where price consolidates within a defined range, reflecting indecision as the market awaits more market-generated information. We apply balance guidelines, favoring fade trades at range extremes (highs/lows) and preparing for breakout setups if balance resolves.
One-Time Framing Up (OTFU): A market condition where each subsequent bar forms a higher low, signaling a strong upward trend.
One-Time Framing Down (OTFD): A market condition where each subsequent bar forms a lower high, signaling a strong downward trend.
Contextual Analysis & Plan
For this week, the main focus will be on whether buyers can sustain the upside momentum following last week’s breakout from the multi-week balance area, which ultimately led to new all-time highs. So far, the auction has done a good job of accepting higher prices, with a distribution forming between 7784 and 7725. This range is now the key area of interest in the short term.
The most bullish response would be continued value building within this range, showing no interest in cleaning up last week’s breakout structure and supporting a continuation of the weekly imbalance phase.
A failure to do so, meaning a break and hold below 7725, would open the door to technical fills of the poor structure. However, unless the auction establishes acceptance back within the prior multi-week balance area, buyers are not in any trouble.
The weekly Smashlevel is 7784, the upper end of last week’s main distribution, highlighted on the chart. Break and hold above 7784 would target the Monthly Extreme High at 7855, which aligns closely with the 50% range extension from the multi-week balance area. Acceptance above 7855 would signal continued strength and open the door for bullish continuation toward the resistance area between 7905 and the Weekly Extreme High at 7935, where selling activity can be expected.
Such a move would effectively complete last week’s bullish imbalance. The faster the market approaches this resistance, the more cautious late buyers should be.
Holding below 7784 would maintain rotational, two-sided activity toward 7725. Acceptance below 7725 would signal “weakness” and open the door for “bearish” continuation toward the support area between 7650 and the Weekly Extreme Low at 7620, where buying activity can be expected.
This support area, which coincides with Tuesday’s gap at 7637 and the prior multi-week balance high 7648, is crucial for buyers to defend. A failure to do so would bring a failed balance breakout into play, opening the door to a shift in the broader tone.
Visual Representation
Key Levels of Interest
In the upcoming week, I will closely observe the behavior around 7784.
Break and hold above 7784 would target 7855 / 7905 | 7935* / 7970 / 7810
Holding below 7784 would target 7725 / 7650 / 7620* / 7589 / 7541
*Weekly Extremes (defined by proprietary models). I exercise caution when initiating trades outside the Weekly Extremes to avoid impulsive decisions at unfavorable locations. Essentially, the Weekly Extremes act as a safeguard against emotionally-driven trades, which is far from ideal for making well-informed decisions.
As usual, a detailed Daily Plan will be posted tomorrow. Hope you all enjoy the rest of the weekend!
Thanks! We appreciate your hard work Smash!
Smash - these are great thank you! Quick question about the VPOC values - there's new color coding and multiple values (some in parentheses). What does it mean?