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ES Weekly Plan | August 21-25, 2023
Below are my expectations for the week ahead.
🟥 Daily: OTFD | Ends: 4396
🟥 Weekly: OTFD | Ends: 4507
🟨 Monthly: BALANCE | TBD
Weekly Extreme High: 4495
Weekly Extreme Low: 4275
As usual, a detailed daily plan will be published tomorrow.
The previous week was largely one-sided after the sellers successfully managed to establish acceptance within the prior 4-week balance area, breaking below the MA50 in the process. The downside pressure resulted in a full traverse of this balance area, effectively bringing an end to the monthly one-time framing up. On Thursday, the previous Weekly Extreme Low of 4390 was reached, and on Friday, it was exceeded by 40 handles. Yet, it's essential to observe how the market bounced on Friday, retracing that decline, emphasizing the significance of maintaining emotional control outside the weekly extremes.
I exercise caution when initiating trades outside the Weekly Extremes to avoid making impulsive decisions at unfavorable locations. Essentially, the Weekly Extremes help prevent me from making emotionally driven trades, which is a state that is not ideal for making informed trading decisions.
For this week, the main focus will be on whether the one-sided activity will continue, or if the market will experience a shift towards two-sided activity, given that the market has now fully traversed the previous 4-week balance area. The daily and weekly is one-time framing down, while the monthly has now returned to balance. The primary objective for buyers is to start establishing at least overlapping value, and obviously the main goal is to end the daily one-time framing down by breaching a previous day’s high. Achieving this would signal that the market is due for a breather, at least in the short-term. The sellers aim to maintain downside pressure by holding below Friday’s spike base of 4388, with the primary objective of continuing the pattern of lower highs and lower lows towards the weekly support area. Overall, the sellers are not facing significant trouble as long as the weekly resistance area is maintained - trouble starts to kick in above.
The weekly level of interest is 4388, representing Friday’s spike base. Break and hold above 4388 would target the short-term value (5D VPOC) at 4425. Break and hold above 4425 would target the resistance area from 4465 to the Weekly Extreme High of 4495, where selling activity can be expected. Note how this resistance area coincides with the MA50. However, of greater significance is its alignment with the last two weekly balance areas, making it a crucial area for sellers to defend and buyers to reclaim.
Holding below 4388 would target 4350, representing both Friday’s low and the low of the prior 4-week balance area. Break and hold below 4350 would target the June roll gap at 4325.50, as well as the support area from 4305 to the Weekly Extreme Low of 4275, where buying activity can be expected. Note how this support area coincides with the 7.5% correction level at 4286, and a weekly NVPOC at 4290.
🟩 Upside: 4425 | 4465 | 4495 | 4520 | 4560 | 4591
🟥 Downside: 4350 | 4325 | 4305 | 4275 |4240 | 4215
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.