ES Weekly Plan | Dec 30 - Jan 3, 2024
My expectations for the upcoming week.
Visual Representation
Economic Calendar
Market Structure
🟨 DAILY: BALANCE | 4D | 6107.50-5965
🟨 WEEKLY: BALANCE | 2W | 6163.75-5898.25
🟩 MONTHLY: OTFU | ENDS: 5724.25
Contextual Analysis
During the previous week, the market focused on cleaning up the poor structure left from the emotional price action of the week before. Monday’s session was precisely contained between 6045 and 5960, marking the initial upside and downside targets. Tuesday’s shortened session reclaimed the 6045 level, signaling strength, ultimately leading to a test of the highlighted weekly resistance area between 6090 and 6120, where sellers were waiting. It's worth noting that buyers failed to fill all single prints from the December 18 session by Thursday, before the market experienced weakness on Friday, resulting in a double distribution profile to the downside after opening with a true gap down.
For this shortened week, the main focus will be on last week’s inside week, which formed entirely within the Wednesday range of the prior week, marking the FOMC weakness. Buyers are targeting a sustained breakout to effectively negate the downward move from the FOMC, while sellers aim for another leg lower through an inside week breakdown. Immediate attention for signs of strength or weakness will be on Friday's double distribution profile, formed after a true gap down that remained unfilled, which will be discussed in more detail in the daily plan.
The weekly Smashlevel is 6034, representing the upper end of Friday’s lower distribution. Break and hold above 6034 would target the unfilled gap at 6063.25. Acceptance above 6063.25 signals strength, targeting the resistance area from 6105 to the Weekly Extreme High of 6135, where selling activity can be expected. This resistance area is the breakdown point from the FOMC weakness that buyers need to regain to negate the move, coinciding with the upper end of the inside week.
Holding below 6034 signals weakness, targeting the lower end of the inside week at 5965, coinciding with the previous week's VPOC. Acceptance below 5965 would target the support area from 5930 to the Weekly Extreme Low of 5900, where buying activity can be expected. Defending this support area is crucial for buyers; otherwise, it opens the door for a move back to the long-term value (90D VPOC) at 5785, effectively filling the gap at 5813.50 in the process.
As usual, a detailed daily plan will be published tomorrow. In the meantime, enjoy the rest of your weekend!
Levels of Interest
In the upcoming week, I will closely observe the behavior around 6034.
Break and hold above 6034 would target 6063 / 6105 / 6135* / 6163 / 6200
Holding below 6034 would target 5965 / 5930 / 5900* / 5856 / 5813
*Weekly Extremes. I exercise caution when initiating trades outside the Weekly Extremes to avoid making impulsive decisions at unfavorable locations. Essentially, the Weekly Extremes serve as a safeguard against emotionally-driven trades, a state that is less than ideal for making well-informed trading decisions.