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ES Weekly Plan | August 7-11, 2023
Below are my expectations for the week ahead.
🟨 Daily: BALANCE | 3D | H: 4570.25 L: 4493.75
🟨 Weekly: BALANCE | 3W | H: 4633.50 L: 4493.75
🟩 Monthly: OTFU | Ends: 4419.50
Weekly Extreme High: 4600
Weekly Extreme Low: 4390
As usual, a detailed daily plan will be published tomorrow.
Monday and Tuesday of the previous week were relatively uneventful. As the week progressed, sellers took control and successfully broke the prior 5DB, leading to the daily shifting to one-time framing down. This break also marked the end of the weekly one-time framing up, signaling a change in the market dynamics. Additionally, the sellers achieved a weekly close below the prior Weekly Extreme Low of 4525, providing another indication of change. The question now is whether sellers can maintain their downward pressure or if stronger buyers will enter the market, considering the wipeout of 15 days' worth of weak-handed buyers.
For this week, the main focus will be on whether acceptance will be established within the prior 4-week balance area, below 4498, or within the current 3-week balance area, above 4498. This level serves as a significant inflection point. The daily and the weekly are in balance, sharing the same low at 4493.75, making it a crucial level in the short-term. The monthly is still one-time framing up, but a break below 4419.50 would put an end to it. Currently, the market is trading between two high volume nodes (HVN), as observed on the 8-week volume profile that I have included. The buyers aim to hold the daily and weekly balance low for a rotation towards the upper HVN, where the weekly resistance area is located. Conversely, the sellers aim to put both the daily and weekly into one-time framing down mode, potentially triggering a downside continuation towards the lower HVN, where the weekly support is located. CPI data is set to be released on Thursday, followed by PPI on Friday.
The weekly level of interest is 4498, representing the prior 4-week balance high. Holding above 4498 would target the most traded price by volume (VPOC) within the 3DB at 4535. Break and hold above 4535 would target the resistance area from 4570 to the Weekly Extreme High of 4600, where selling activity can be expected. Be sure to observe that this resistance area coincides with both the 3DB high and a slightly higher short- and medium-term value located at 4604, making it a crucial area for sellers to defend. Additionally, take note of the unfilled daily gap at 4591.
Break and hold below 4498 would target 4478, representing the unfilled daily gap from 7/12, as well as the afternoon pullback from 7/11 at 4451. Break and hold below 4451 would target the support area from 4420 to the Weekly Extreme Low of 4390, where buying activity can be expected. Be sure to observe that this support area coincides with the most traded price by volume (VPOC) from both the last eight weeks and the previous 4-week balance area, making it crucial for buyers to defend. Additionally, a break of 4419.50 would put the monthly one-time framing up to an end.
🟩 Upside: 4535 | 4570 | 4591 | 4600 | 4634 | 4660
🟥 Downside: 4478 | 4455 | 4420 | 4390 | 4355 | 4327
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.