ES Weekly Plan | January 22-26, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 4815
🟩 WEEKLY: OTFU | ENDS: 4746.25
🟩 MONTHLY: OTFU | ENDS: 4552
Contextual Analysis
During the previous week, an uncommon occurrence took place as the market tested both the highlighted support and resistance areas. Early weakness prompted a test of the support area on Wednesday. The market fell 16 handles short of reaching the Weekly Extreme Low of 4730, where buyers stepped in, initiating a rally that eventually led to testing the resistance area on Friday, effectively printing a new all-time high and resolving the unfinished business.
For this week, our main focus will be on whether the buyers can sustain the directional move away from the prior 4-week balance area following Friday’s breakout. Accordingly, we will monitor for continuation (Acceptance) or the lack thereof (Rejection). The market is one-time framing up across all time frames, indicating that buyers maintain full control of the auction. The primary objective for buyers is to establish value by spending time and volume at these higher prices, implying acceptance. This scenario would suggest a bullish response, indicating that the upward auction is not yet complete. I will keep a close eye on the buyers' ability to shift the short-term value (5D VPOC) higher, currently at 4792. The most bearish scenario would involve established acceptance back within the prior 4-week balance area, indicating a failed breakout. This scenario has potential to develop weakness, especially considering that we have now resolved the unfinished business at the prior ATH (4839.75). As always, a lack of continuation following a breakout attempt can trigger moves in the opposite direction; in this case, to the other side of the 4-week balance area.
The weekly Smashlevel (Pivot) is 4860, representing Friday’s pullback low after printing a new ATH (4874.25). Holding above 4860 would target an upside continuation towards the prior Weekly Extreme High of 4900. Break and hold above 4900 would target the resistance area from 4930 to the Weekly Extreme High of 4960, where selling activity can be expected. Noteworthy is the confluence with both the Weekly Extreme High and the 100% range expansion from the most recent 4-week balance area, further amplifying the significance of this level.
Break and hold below 4860 would target fills of the poor breakout structure towards 4835, coinciding with the previous week’s value area high (VAH). Acceptance below 4835, would raise doubts about the breakout, targeting the support area from 4810 to the Weekly Extreme Low of 4780, where buying activity can be expected. Note how this support area coincides with the MA20, both the Weekly and Monthly VWAP, and the most traded price by volume over the last six weeks at 4793—a crucial area for buyers to hold.
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 4860.
Break and hold above 4860 would target 4900 / 4930 / 4960* / 4993 / 5030
Holding below 4860 would target 4835 / 4810 / 4780* / 4746 / 4710
*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.
Thanks so much for sharing your insight Smash. Your weekly consistency & repetition has truly helped me develop my own style & I’d bet your analysis resonates with many others out there 👍
Much appreciate all your good work. Thank you for everything you are doing!