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ES Weekly Plan | July 17-21, 2023
Below are my expectations for the week ahead.
🟩 Daily: OTFU | Ends: 4531
🟩 Weekly: OTFU | Ends: 4424
🟩 Monthly: OTFU | Ends: 4178
Weekly Extreme High: 4620
Weekly Extreme Low: 4455
As usual, a detailed daily plan will be published tomorrow.
During the previous week, the market was characterized by the dominant presence of buyers, as they consistently achieved higher highs and higher lows throughout the week. Their efforts resulted in a successful breakout from the multi-week balance area on Wednesday, reaching the prior Weekly Extreme High of 4525. Although the market saw a pullback of ~30 handles from that level, the buyers managed to sustain a continuation to the upside on Thur/Fri. However, the most traded price by volume (VPOC) last week remained in the lower distribution.
For this week, the main focus will be on whether the buyers can sustain the directional move away from the prior 4-week balance area. The market is one-time framing up across all time frames, indicating that buyers are in full control of the auction. The primary objective for sellers is to put an end to the daily one-time framing up, and until that occurs, maintaining a bearish stance becomes quite challenging. It is worth noting that the short-term value (5-day VPOC) is nearly 100 handles lower than Friday’s settlement. Having that said, the buyers aim to spend time and volume within the previous week’s upper distribution to migrate the short-term value higher. Such a scenario would indicate a bullish response, suggesting that the upward auction is not yet complete. The most bearish outcome would be established acceptance back within the prior 4-week balance area, indicating a failed breakout.
The weekly level of interest is 4525, which represents the low volume node (LVN) from the previous week’s upper distribution. In essence, this is the high of Wednesday’s session, coinciding with the release of the CPI data. Holding above 4525, indicating that the market has not auctioned high enough to find an opposite response, would target Friday’s (excess) high of 4560. Break and hold above 4560 would target the resistance area from 4590 to the Weekly Extreme High 4620, where selling activity can be expected. Take note of the March high from 2022 slightly above at 4631.
Break and hold below 4525 would target the support area from 4485 to the Weekly Extreme Low 4455, where buying activity can be expected. Take note of the unfilled daily gap at 4478.50, and how the support area coincides with the value area high (VAH) from the added 5-week volume profile. In other words, this area carries immense importance as it presents a substantial challenge for sellers to break and serves as a crucial area for buyers to defend. As I’ve mentioned since the month of April, 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, which has yet to occur.
🟩 Upside: 4560 | 4590 | 4620 | 4631 | 4670 | 4695
🟥 Downside: 4485 | 4455 | 4420 | 4385 | 4355
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.