ES Weekly Plan | February 12-16, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 5016.25
🟩 WEEKLY: OTFU | ENDS: 4937.75
🟩 MONTHLY: OTFU | ENDS: 4552
Contextual Analysis
During the previous week, the market remained within the range established by the prior Friday's trend day on Monday and Tuesday, effectively filling the poor structure formed. However, change took place on Wednesday, as the market opened with a true gap higher, which remains unfilled. The fact that the gap remains unfilled signals strength, a sentiment that was reflected throughout the remainder of the week as the market continued its upward price discovery process. We are nearing both the Monthly and Quarterly Extreme Highs, an area worth monitoring closely, particularly given the early stage of the month and quarter.
For this week, our main focus will be on the previous week’s double distribution profile, which formed after Wednesday’s true gap higher, still remaining unfilled. The market is one-time framing up across all time frames, indicating that buyers maintain full control of the auction. During February, the daily chart has yet to print a lower low, making it the primary objective for sellers to achieve. Maintaining within the upper distribution (#1) of the previous week, above the prior 2-week balance area, would signal a bullish outcome, setting the stage for an upside continuation. Conversely, filling the gap at 4978.25 and establishing acceptance within the lower distribution (#2) would cast doubt on the directional move from Wednesday onwards—making the support area from 4990 to 4960 crucial for buyers to hold. CPI data is set to be released on Tuesday, followed by PPI on Friday.
The weekly Smashlevel (Pivot) is 5034, representing Friday’s breakout single prints, forming a double distribution profile. Holding above 5034, indicating continued directional conviction, would target both the Monthly and Quarterly Extreme Highs at 5067 and 5071, respectively. Acceptance above 5071 would target the resistance area from 5100 to the Weekly Extreme High of 5130, where selling activity can be expected. Note how this resistance area coincides with the 100% range extension at 5122 from the most recent 2-week balance area.
Break and hold below 5034, would negate Friday’s trend day, targeting the support area from 4990 to the Weekly Extreme Low of 4960, where buying activity can be expected. Note how this support area coincides with the upper end of both the prior 2-week balance area and the previous week’s lower distribution. For any significant change to occur in the bigger picture, the sellers would need to break and hold below the Weekly Extreme Low, with a weekly close below it being preferred.
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 5034.
Holding above 5034 would target 5071 / 5100 / 5130* / 5165 / 5200
Break and hold below 5034 would target 4990 / 4960* / 4920 / 4890 / 4865
*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.
Nice work as always. Thanks, Smash!
Thank you, how did you come up with the extreme levels to the upside which are not traded yet like 5071, 5100, 5122 etc...