ES Weekly Plan | July 8-12, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 5585.50
🟨 WEEKLY: BALANCE | 3W | H: 5626 L: 5489.75
🟩 MONTHLY: OTFU | ENDS: 5246.75
Contextual Analysis
During the previous shortened week, sellers successfully ended the weekly one-time framing up on Monday, following the break of the prior week’s low. Despite initial weakness, sellers only partially filled the remaining single prints from the trend day on 6/17, indicating their lack of strong conviction, as noted in Tuesday’s plan. The lack of initiating sellers below the multi-day value triggered buying activity that not only traversed the value area but also initiated a breakout during Wednesday’s shortened session. Friday’s session saw a continuation higher, reaching the Weekly Extreme High of 5615, with the after-hours session closing at that level to the tick after a brief price exploration higher. With the formation of an outside week to the upside, we are now monitoring for continuation or lack thereof. Keep an eye on the buyers' ability to shift the short-term value higher (5D VPOC), currently at 5531, along with the 20-day VPOC.
For this week, our main focus will be on whether the buyers can sustain the directional move away from the prior 11-day balance area, following Wednesday’s breakout and Friday’s continuation higher. As we monitor for continuation (acceptance) or lack thereof (rejection), the most bullish scenario would see the market establishing value at higher prices, showing no interest in technical fills towards the breakout point at 5585, and maintaining the daily one-time framing up. Conversely, the weakest response would be a failure to find initiating buyers above 5585, potentially triggering a move back to value, i.e., the high volume node (HVN) at 5531. CPI data is scheduled for release on Thursday, followed by PPI on Friday.
The weekly Smashlevel (Pivot) is 5585, representing the prior 11-day balance high and breakout point. Holding above 5585, indicating a successful breakout, would target Friday’s spike base at 5621. Acceptance above 5621 would then target an upside continuation toward 5655, as well as the resistance area from 5685 to the Weekly Extreme High of 5715, where selling activity can be expected. It's important to note the Monthly Extreme High for July at 5715, which adds another layer of confluence to the resistance area. In essence, the quicker the market approaches 5715, the more cautious I would be about chasing new longs.
Break and hold below 5585, indicating a failed breakout, would target the support area from 5555 to the Weekly Extreme Low of 5525, where buying activity can be expected. Note how this support area coincides with the high volume node (HVN) from the past three weeks, making it a crucial area for buyers to defend.
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.
Holding above 5585 would target 5621 / 5655 / 5685 / 5715* / 5745
Break and hold below 5585 would target 5555 / 5525* / 5490 / 5455 / 5437
*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! Let's smash this week!
Thank you 🙏