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ES Weekly Plan | February 27 - March 3, 2023
🟥 Daily: OTFD | Ends: 3984
🟥 Weekly: OTFD | Ends: 4056.25
🟩 Monthly: OTFU
Weekly Extreme High: 4105
Weekly Extreme Low: 3845
As usual, a detailed daily plan will be published tomorrow.
Because it was a holiday, Monday's shortened session is not included in the chart. On Tuesday, sellers immediately took control of the auction as they managed to break the 3-week balance to the downside, forming a double distribution. As a result, the weekly is currently one time framing down. On Wednesday, the pattern of lower highs and lower lows persisted, but it was a very choppy session because the MA50 was being tested. Thursday’s session exhibited significant volatility and unpredictability, with the morning session producing a poor high that triggered intense selling pressure and pushed the market down to the Weekly Extreme Low of 3970 from the previous week. We witnessed a significant reversal worth 50 handles after the market hit a low of 3974.25 during the session. This serves as a reminder of why it is important to be cautious when approaching the Weekly Extremes. The level of 3970 was a good location for those with short positions to book profits, rather than initiate new short positions. Greedy sellers who failed to exercise caution were severely punished during that short-covering rally. The absence of fresh buying interest after the short-covering caused Friday's session to fully retract the rally. The market managed to close above the 3970 level by the end of Friday's session, as sellers encountered difficulty in gaining momentum below it.
For this week, the main focus will to be on whether the sellers can follow through to the downside following the weekly breakdown. Both the daily and weekly are one time framing down. Buyers main objective is to end the daily one time framing down by breaching 3984. Note that we are currently trading within the most traded price by volume on the volume profile to the far right. Worth noting is that the 90-day VPOC shifted to 3966 from 3845. The sellers want to establish acceptance below this high volume node to attack the weak area from the multi-week imbalance.
The weekly level of interest is 3984, which is Friday’s high. Break and hold above 3984 would target 4030, which is the prior 3-week balance low. Break and hold above 4030 would target the resistance area from 4070 to the Weekly Extreme High 4105, where selling activity can be expected. Note that we have an unfilled daily gap within the resistance area at 4097.25.
Holding below 3984 would target 3920. Break and hold below 3920 would target the support area from 3880 to the Weekly Extreme Low 3845, where buying activity can be expected. Note how 3845 aligns with the 20% correction level 3847. The 2023 RTH open is at 3881, which is also worth noting.
🟩 Upside: 4030 | 4070 | 4105 | 4135 | 4185 | 4220
🟥 Downside: 3920 | 3880 | 3845 | 3785 | 3730 | 3692
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. Twitter: @smashelito | FAQ: smashelito.com