ES Weekly Plan | July 22-26, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟥 DAILY: OTFD | ENDS: 5604.75
🟨 WEEKLY: BALANCE | 3W | H: 5721.25 L: 5504.50
🟩 MONTHLY: OTFU | ENDS: 5246.75
Contextual Analysis
During the previous week, the market maintained its pattern of higher highs and higher lows early on, testing the Monthly Extreme High at 5715. Tuesday’s session concluded with a strong close, marked by an upward spike. However, this closing strength was sharply rejected on Wednesday, following a large true gap down that remained unfilled, shifting the daily back to balance. The session closed precisely within the “distribution of interest” highlighted in the prior weekly plan. As discussed, a downside break from this distribution had the potential to intensify selling pressure, and Thursday’s and Friday’s sessions clearly demonstrated this. Sellers managed to establish an outside week down, which not only ended the weekly one-time framing up but also fully retraced the breakout initiated on July 3rd, approaching the medium-term value (20D VPOC) at 5530.
For this week, the main focus will be on the highlighted prior multi-day balance area from late June. The high volume node (HVN) within this area, at 5530, has served as a significant downside magnet during the recent weakness and was nearly tagged on Friday. With the market having reached an area of prior balance, it’s expected that the downward auction will slow, making early-week conditions potentially tricky to navigate. More favorable opportunities may emerge at the balance extremes, applying the balance guidelines as illustrated on the chart.
The weekly Smashlevel (Pivot) is 5585, representing the high of the prior multi-day balance. Break and hold above 5585 would target the previous weekly low, which ended the weekly one-time framing up at 5615—a notable low volume node (LVN) last week. Acceptance above 5615 would then target the resistance area from 5645 to the Weekly Extreme High of 5675, where selling activity can be expected.
Holding below 5585, signaling weakness, would target the high volume node (HVN) at 5530, marking the completion of the downward move back to value. Acceptance below 5530 would then target the low of the prior multi-day balance at 5490, completing the full traverse of the balance area. Break and hold below 5490 would target the support area from 5460 to the Weekly Extreme Low of 5430, where buying activity can be expected. Note how this support area coincides with the ESM24 roll gap at 5437.50, along with MA50 and the 5% correction level.
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 5585.
Break and hold above 5585 would target 5615 / 5645 / 5675* / 5690 / 5715
Holding below 5585 would target 5530 / 5490 / 5460 / 5430* / 5410
*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 Smash, HAGW!