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:
Weekly Levels in Review
Last week kicked off with three days of consolidation, with 7784 (Weekly Smashlevel) capping the upside. This consolidation remained bullish in the context of the recent multi-week balance breakout, as reiterated throughout the week, with the market continuing to accept higher prices. The fact that the market continued to show no interest in filling the poor structure from the multi-week balance breakout was another bullish nuance.
It’s important to distinguish between poor structure formed within a balanced market and poor structure created during a breakout. These are two very different situations. Poor structure within balance is generally more likely to be cleaned up, whereas poor structure created during a genuine breakout can be much more likely to remain intact.
Change took place on Thursday, as the auction once again attempted to transition from balance to imbalance on the daily timeframe, printing new all-time highs in the process (see Figure 1).
The market held above the key 7784 level early in the session, leading to an impulsive move higher. While this initial move was difficult to catch, the first pullback provided an excellent opportunity to join the move as selling pressure was absorbed by passive buyers (see Figure 2).
Thursday’s shift in tone and Friday’s inside day led to the formation of a double distribution on the weekly profile, and the low volume node separating the two distributions is now of short-term interest. Note that the weekly VPOC failed to migrate higher, making it a potential downside magnet if Thursday’s breakout fails.
A quick note on NQ: following the failure to hold below the HTF level at 27930, a sharp counter-auction unfolded. Two levels were shared last week, 30030 and 29390, and I would continue to monitor both. 30030 was breached on Thursday, with buyers defending the level on Friday (see Figure 3). Holding above 30030 targets the multi-week balance highs, while failure to do so would open the door to a revisit of 29390.
Economic & Earnings Calendar
Eastern Standard Time
Earnings Whispers
Market Structure
🟩 Daily: OTFU | Ends at: 7796.50
🟩 Weekly: OTFU | Ends at: 7738
🟩 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 buyers’ ability to sustain the multi-day balance breakout initiated on Thursday, which led to a new all-time high and the formation of a double distribution on the weekly profile.
Immediate attention is on the low volume node separating the two distributions around 7793. Continued value building above this LVN would keep both the breakout and the broader imbalance phase intact as the market continues to search for value.
A failure to defend the LVN, suggesting a failed breakout, could increase confidence in a move in the opposite direction. The primary objective would be to traverse last week’s lower distribution toward the 7735–7725 support area. There’s plenty of poor structure below this support, but even if it gets filled, buyers remain in control from a bigger-picture perspective as long as the multi-week balance breakout remains intact.
The weekly Smashlevel is 7793, the LVN separating last week’s distributions. Holding above 7793 keeps the breakout intact and targets the Monthly Extreme High at 7855, which aligns closely with the 50% range extension from the multi-week balance area (7849). 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 the bullish imbalance from two week’s ago. The faster the market approaches this resistance, the more cautious late buyers should be.
Break and hold below 7793 would reject the breakout, targeting 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 7793.
Holding above 7793 would target 7855 / 7905 | 7935* / 7970 / 7810
Break and hold below 7793 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!
I will try to drop a thank you note for every one of these free articles because you need not keep it free. I have been following you for a few years now but never bothered to comment in X.
Tremendous work! Thanks Smash.