ES Weekly Plan | February 13-17, 2023

🟥 Daily: OTFD | Ends: 4104.25
🟩 Weekly: OTFU | Ends: 4069.75
🟩 Monthly: OTFU

Weekly Extreme High: 4225
Weekly Extreme Low: 3970

As usual, a detailed daily plan will be published tomorrow.

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The previous week ended as an "inside week," characterized by its price range being contained within the previous week's range. This signals that the market is pausing and consolidating after a period of imbalanced trading activity. Note how we completely filled the poor structure from the FOMC breakout highlighted in green. On Friday, buyers were active within the prior weekly support area.

I exercise caution when initiating trades outside the Weekly Extremes to avoid making impulsive decisions at unfavorable locations. Essentially, the Weekly Extremes help prevent me from making emotionally driven trades, which is a state that is not ideal for making informed trading decisions.

For this week, the main focus will to be on the extremes of the inside week, with the lower extreme being of greater significance due to Friday's close at the lower end of the weekly range. As a general guideline, it's advisable to go with the break of the inside week. If there is a break to the upside, meaning a look above and go, then you should consider becoming a buyer. Conversely, if there is a break to the downside, meaning a look below and go, then you should consider becoming a seller. It's crucial to monitor the market to see if there is continuation or acceptance of the break. If there is a lack of continuation, meaning the market looks above or below and fails, then it's advisable to fade the market and target the opposite side of the balance. It's important to consider the context, as Friday’s session closed at the lower end of the inside week. With that in mind, a downside break has greater potential for a move, as the support area is down at 4010-3970. On the other hand, a break to the upside will immediately encounter the resistance area, making it less appealing to go with the break. Also, be prepared that the market may remain in a state of consolidation. The CPI data is set to be released on Tuesday. The daily is one time framing down, while the weekly and monthly are still OTFU. Note that inside bars don’t end one time framing, as such the weekly is still technically considered to be up. Sellers main objective is to end the weekly OTFU, by breaking the inside week to the downside.

The weekly level of interest is 4090. Holding above 4090 would target 4130, which has been the most traded price by volume over the past two weeks. Note that we have the monthly VWAP in close connection. Break and hold above 4130 would target the resistance area from 4185 to the Weekly Extreme High 4225, where selling activity can be expected. Note the unfilled weekly gap within the resistance area at 4220.75.

Break and hold below 4090 would target weekly NVPOC of 4055. Break and hold below 4055 would target the support area from 4010 to the Weekly Extreme Low 3970, where buying activity can be expected. Note how this support area coincides with the most traded price by volume on the volume profile on the far right, which is plotted starting from August 15th (prior swing high). Additionally, MA50 and MA200 are also nearby. This support area is crucial for buyers to maintain.

🟩 Upside: 4130 | 4185 | 4225 | 4255 | 4300 | 4335
🟥 Downside: 4055 | 4010 | 3970 | 3915 | 3870 | 3847

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Economic Calendar

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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.
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