ES Weekly Plan | January 8-12, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟥 DAILY: OTFD | ENDS: 4760.25
🟨 WEEKLY: BALANCE | 3W | H: 4839.75 L: 4719.75
🟩 MONTHLY: OTFU | ENDS: 4552
Contextual Analysis
During the previous week, sellers managed to break the pattern of higher lows on the weekly chart, shifting the weekly back to balance. Ending the weekly one-time framing up introduced downside pressure, resulting in the attainment of all weekly downside targets already on Thursday’s session. In Friday's plan, I mentioned avoiding excessive aggression on the short side, considering the attainment of the Weekly Extreme Low at 4735. Despite a downside continuation in the overnight session, closing the FOMC breakout single prints, the RTH session on Friday closed back at 4734.75—illustrating the importance of avoiding impulsive decisions at unfavorable locations.
For this week, our main attention will be on the b-shaped profile from the previous week, indicating long liquidation. The key question at present is whether sellers can sustain the downward pressure, negating the FOMC breakout, or if the shakeout of weak longs from the previous week has created an opportunity for stronger buyers to enter the market and target the unfinished business at the ATH’s. The daily is one-time framing down, and the weekly has finally returned to balance following the break of the previous week’s low. I will use the 4756/4767 area as a reference point to assess the state of the market. Holding below it would increase the odds of a downside continuation, while a break and hold above would confirm the lack of stronger sellers (following long liquidation), potentially triggering a short-covering rally. CPI data is set to be released on Thursday, along with Jobless claims, followed by PPI on Friday.
The weekly Smashlevel (Pivot) is 4756/4767, representing the most trade price by volume (VPOC) the previous week and the last four weeks. Break and hold above 4756/4767, has potential to trigger short-covering, targeting the resistance area from 4795 to the Weekly Extreme High of 4825, where selling activity can be expected. In the case of continued strength, the RTH ATH and ON ATH are at 4839.75 and 4841.50, respectively. This area is marked as unfinished business due to the lack of excess.
Holding below 4756/4767 would target the untested single print area (in RTH) from the FOMC breakout (green bar) at 4720/4710. Break and hold below 4720/4710, would shift the weekly to one-time framing down, and target the support area from 4675 to the Weekly Extreme Low of 4645, where buying activity can be expected. It’s worth noting that the Monthly Extreme Low (January) is located at 4647, adding an additional layer of confluence to the support area.
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 4756/4767.
Break and hold above 4756/4767 would target 4767 / 4795 / 4825* / 4841 / 4870
Holding below 4756/4767 would target 4720 / 4710 / 4675 / 4645* / 4633
*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.
Thank you! Should be an interesting week!
Thank you for your great work 🤟