ES Weekly Plan | July 1-5, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟨 DAILY: BALANCE | 9D | H: 5585 L: 5489.75
🟩 WEEKLY: OTFU | ENDS: 5510.75
🟩 MONTHLY: OTFU | ENDS: 5246.75
Contextual Analysis
Responsive activity dominated the previous week, as the market mainly traded within the initial upside target of 5570 and downside target of 5515, outlined in the previous weekly plan. Over the past nine sessions, market participants have unanimously agreed on the value, resulting in an opposing response to any deviation from it. This has made the mean reversion strategy of buying below value and selling above value quite successful. However, this situation is not expected to last forever, and a shift will eventually occur. Such a shift may occur if buyers perceive the market as undervalued or sellers regard it as overvalued, resulting in a directional move. It’s important to note that markets are constantly shifting between balance and imbalance, and the longer a consolidation phase lasts, the more significant the subsequent breakout tends to be.
For this shortened week, our main focus will be on the current multi-day balance area, specifically its value area ranging from 5525 to 5555. Responsive two-sided activity is expected within this relatively narrow range, while a stronger directional move will require acceptance beyond these extremes. The most bullish scenario would involve consolidation above the multi-day value, as illustrated on the chart, signaling a potential breakout attempt in progress. Conversely, the most bearish scenario would involve consolidation below the multi-day value, effectively ending the weekly one-time framing up and potentially unlocking weakness. In Friday’s RTH session, a new ATH was printed at 5585; however, it fell short of taking out the overnight ATH at 5588, which remains a reference to carry forward.
The weekly Smashlevel (Pivot) is 5525, representing the value area low (VAL) from the current multi-day balance area. Break and hold above 5525 would target a traverse toward the value area high (VAH) at 5555. Acceptance above 5555, indicating initiating buyers, would then target the resistance area from 5590 to the Weekly Extreme High of 5615, where selling activity can be expected. We carry forward the overnight ATH at 5588, which remains untested in RTH.
Holding below 5525, indicating initiating sellers, would target the lower end of the multi-day balance area at 5490. Break and hold below 5490, signaling weakness, would target the support area from 5450 to the Weekly Extreme Low of 5425, where buying activity can be expected. Take note of the ESM24 roll gap at 5437.50, along with the June VWAP and MA20 within this 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 closely observe the behavior around 5525.
Break and hold above 5525 would target 5555 / 5590 / 5615* / 5630 / 5655
Holding below 5525 would target 5490 / 5450 / 5425* / 5410 / 5385
*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
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Typo I think for holding below smashlevel….says 4910
It was definitely a weak seller. The unprocessed singles inside Monday are still worth noting. Hopefully, some catalysts next week will resolve them.