ES Weekly Plan | December 4-8, 2023
My expectations for the upcoming week.
Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 4562.50
🟩 WEEKLY: OTFU | ENDS: 4544.75
🟨 MONTHLY: BALANCE | 5M | H: 4633.50 L: 4122.25
Contextual Analysis
For most of the previous week, the market was in a short-term state of balance. The main level of interest was the unfilled daily gap at 4554.75, successfully filled by sellers but without gaining traction below. On the other hand, buyers were able to negate the excess high from the prior week, filling the gap at 4591 in the process. Friday’s session saw a double distribution trend day to the upside, breaking out from the balance area, which we now must monitor for continuation.
For this week, the main focus will be on whether the buyers can maintain the momentum initiated by Friday's double distribution trend day, marking a breakout from the recent multi-day balance area. Currently, the daily and weekly time frames are one-time framing up, contrasting with the monthly that remains in balance. Notably, the market is edging closer to the monthly balance high of 4633.50, a level that concurrently represents the year-to-date (YTD) high. This reference serves as the primary target for buyers in the event of an upside continuation, which would shift the monthly to one-time framing up if breached. The sellers aim to negate Friday’s trend day by establishing acceptance within the Friday’s lower distribution, targeting fills of the low volume area (LVA) highlighted in the included 3-week volume profile.
The weekly level of interest is 4585, which represents Friday’s halfback, located at the upper end of the lower distribution. Holding above 4585, indicating acceptance of Friday’s trend day and breakout, would target the year-to-date (YTD) high at 4633.50, where there is also untested overnight activity at 4634.50. Break and hold above 4633.50, would shift the monthly to one-time framing up, and target the resistance area from 4655 to the Weekly Extreme High of 4685, where selling activity can be expected.
Break and hold below 4585 would put Friday’s trend day and breakout into question, and target fills of the low volume area (LVA) highlighted in the included 3-week volume profile towards the support area from 4550 to the Weekly Extreme Low of 4520, where buying activity can be expected. This would effectively put an end to the weekly one-time framing up in the process (4544.75). For any significant change to occur in the bigger picture, the sellers would need to break and hold below the Weekly Extreme Low. A preference is placed on achieving a weekly close below this level, as it would indicate the potential for a more profound decline.
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 observe 4585
Holding above 4585 would target 4633 / 4655 / 4685* / 4730 / 4760
Break and hold below 4585 would target 4550 / 4520* / 4490 / 4465 / 4436
*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.
Economic Calendar
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.
Great work!
Thank you, buddy! Let's have another great week!