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ES Weekly Plan | July 10-14, 2023
Below are my expectations for the week ahead.
🟨 Daily: BALANCE | 2-Day | H: 4476 L: 4419.50
🟨 Weekly: BALANCE | 4-Week | H: 4498 L: 4351.25
🟩 Monthly: OTFU | Ends: 4062.25
Weekly Extreme High: 4525
Weekly Extreme Low: 4340
As usual, a detailed daily plan will be published tomorrow.
The previous week, although shortened, was fairly eventful. On Monday, and on Wednesday, the trading activity remained within the range established on the preceding Friday. Exhausted buyers were unable to attempt a breakout, resulting in a true gap to the downside on Thursday. As a result, the prior weekly support area was tested, encountering buying activity. Friday’s session effectively closed the gap, providing an opportunity for the trapped buyers to get out.
For this week, the main focus will be on the previous week’s inside week, with particular emphasis on its lower end due to Friday’s closing weakness. The lower end is also the location of the medium-term value (20-day VPOC). The current state of the market on both the daily and weekly is characterized by balance, highlighting the application of balance rules, with particular attention given to the inside week. The general guideline is to go with the break. Break to the upside, you want to be a buyer. Break to the downside, you want to be a seller. Monitor for continuation (Acceptance) or lack thereof. Lack of continuation (failed breakout), you want to fade and target the middle and opposite side of the range. Friday’s close near the lower end of the inside week, makes a potential downside break more appealing to go with, as opposed to an upside break that would immediately run into resistance. However, the prevailing trend is to the upside, typically making it more challenging for breakdowns to succeed.
The weekly level of interest is 4450, which represents the high of Thursday’s session, and this is also where notable changes occurred in Friday's session. On the right, you will find an enlarged volume profile from last week, allowing for a clearer observation of the volume ledge specifically at 4450. Additionally, take note of the 4-week volume profile, where it becomes evident that 4450 essentially represents the value area high. Break and hold above 4450 would target the resistance area from 4495 to the Weekly Extreme High 4525, where selling activity can be expected. Note how this area coincides with the upper end of both the inside week and the 4-week balance area.
Holding below 4450 would target 4420, which represents the both the low of the inside week, as well as the medium-term value. Break and hold below 4420, indicating a successful breakdown of the inside week, would target the support area from 4370 to the Weekly Extreme Low 4340, where buying activity can be expected. Note how this area coincides with the lower end of the 4-week balance area. As I’ve mentioned the recent Weekly Plans, for any significant change to occur in the bigger picture, the sellers would need to break and hold below the Weekly Extreme Low, with a weekly close below it being preferred.
🟩 Upside: 4495 | 4525 | 4570 | 4600 | 4631
🟥 Downside: 4420 | 4370 | 4340 | 4327 | 4305
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.