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
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 Monday’s session opening within the prior week’s gap area and immediately finding responsive sellers. The auction then developed a 3-day balance heading into Tuesday. As discussed, this represented a bearish consolidation until proven otherwise, given the unfilled gap at 7525.25. Responsive two-sided activity continued on Tuesday, resulting in an inside day between the key levels of 7485 and 7425 (see Figure 1).
Change took place on Wednesday following the FOMC meeting, as sellers initiated a balance breakdown. When the market moves away from balance (value), the key question is whether those new prices are accepted or rejected. Acceptance indicates that the market is willing to do business at the new price levels, allowing the move to continue. Rejection signals a lack of participation and often results in a rotation back toward prior value.
Wednesday’s breakdown attempt from balance was rejected on Thursday. Sellers failed to defend the key levels at 7371 and 7398 needed to sustain the breakdown, triggering a rotation back toward value. The 7398 level offered great long opportunities during the RTH session, especially with VIX holding below its intraday support (see Figure 2).
The key question heading into Friday’s session was whether buyers could build on sellers’ inability to sustain Wednesday’s breakdown and make another attempt at filling the gap at 7525.25. When directional moves away from value fail to gain acceptance, as we saw on Wednesday, confidence in a counter-move typically increases. This is why some of the best trading opportunities arise when one side attempts to move the market away from value but fails to gain acceptance.
Ultimately, buyers absorbed the early liquidation break on Friday, allowing the auction to fill the gap at 7525.25 and close out the week above the developing weekly value area (see Figure 3).
Regarding NQ and the HTF level at 27930 shared last week (see Figure 4): Wednesday saw a hard flush below the level, but interestingly, buyers immediately reclaimed it on Thursday. Holding this level would be a sign of strength moving forward, while failure to do so would open the door to sustained downside pressure.
Weekly Levels in Review
Economic & Earnings Calendar
Eastern Standard Time
Earnings Whispers
Market Structure
🟩 Daily: OTFU → Ends at: 7427.50
🟨 Weekly: BALANCE → 12-week → High: 7648.75 / Low: 7247.25
🟩 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
After spending several sessions in balance, a period of two-sided trade, the auction initiated a move higher on Friday and filled the gap at 7525.25. The key question heading into this week is whether buyers can sustain that initiative behavior and gain acceptance at higher prices, something sellers failed to achieve after Wednesday’s breakdown attempt.
A strong response would see buyers hold above 7485, a pivotal level within the current multi-week balance area. This would set the stage for a move toward the all-time highs, with 7556 serving as the immediate resistance.
A weak response would see buyers fail to maintain acceptance above 7485, putting Friday’s initiative move into question. Failure to hold this level would open the door to continued rotational activity around the high volume node (HVN) at 7440, with 7427 serving as immediate support.
The weekly Smashlevel is 7485, a pivotal level over the past 12 weeks. Holding above 7485 signals stability and targets 7556. Acceptance above 7556 would signal strength and open the door for bullish continuation toward the resistance area between 7635 and the Weekly Extreme High at 7665, where selling activity can be expected.
This resistance area is crucial for sellers to defend in order to prevent a breakout from the multi-week balance area.
Break and hold below 7485 would put Friday’s initiative move into question and shift focus to 7427. Acceptance below 7427 would signal weakness and open the door for bearish continuation toward the support area between 7365 and the Weekly Extreme Low at 7335, where buying activity can be expected.
This support area, which coincides with multiple prior weekly lows and marks the lower end of the large composite distribution, is crucial for buyers to defend. A break of this support area would end the monthly one-time framing higher (7345.75).
Visual Representation
Key Levels of Interest
In the upcoming week, I will closely observe the behavior around 7485.
Holding above 7485 would target 7556 / 7635 / 7665* / 7735 / 7800
Break and hold below 7485 would target 7427 / 7365 / 7335* / 7300 / 7250
*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.
Daily plan drops tomorrow. Recharge, reset, and let’s get ready to smash the week.
Thank you for sharing your weekend work
It creates structure Processes and procedures for the coming week ahead and helps provide a clear understanding of the week just passed
It is very helpful to a SMOL
Hagw rest recharge 🤝
Have a great week, and thank you so much for all the time you put into this great work.