🟥 Daily: OTFD | Ends: 3934.75
🟨 Weekly: BALANCE | 3 Week | H: 4080.50 L: 3846.25
🟨 Monthly: BALANCE | 3 month | H: 4208.50 L: 3814.50
Weekly Extreme High: 4040
Weekly Extreme Low: 3755
As usual, a detailed daily plan will be published tomorrow.
Starting from Monday, I will be transitioning to the ESM23 contract. Please note that I do not back-adjust my charts. On the chart, I have marked the settlements for both ESM23 and ESH23 from Friday’s session. Last week, the sellers took control of the market after prices were rejected on Monday above the highs of the previous two weeks. On Tuesday, the market returned to previous week’s VPOC of 3985, cleaning up the poor structure from the 3/3 session in the process. On Wednesday, the market paused and mostly traded within the lower end of Tuesday's range. Similar to Monday’s session, buyers made an initial effort to gain acceptance above the high of the previous day on Thursday. However, their attempt was unsuccessful and resulted in an outside day down with a close below the Weekly Extreme Low of 3935 from last week. The market continued its directional move away from value on Friday, breaching the weak area from January, as sellers managed to defend the 3935 level almost to the tick.
For this week, the main focus will to be on whether the sellers can establish acceptance at these lower prices following the directional move away from value. Note how thin the lower end of the weekly profile is. Sellers main objective is to build value at these lower prices, which would indicate that the auction is not finished in that direction. Conversely, if sellers fail to establish value, it could attract responsive activity, targeting a return to prior value, which is around the highlighted resistance area. The daily is OTFD after Friday’s downside continuation. The weekly is in a 3 week balance as buyers ended the weekly OTFD on Monday. The monthly remains in a 3 month balance. Note that last week’s directional move brought us to the area of prior balance from December, and we have basically erased the gains of this year.
The weekly level of interest is 3920, which is Friday’s afternoon rally high (ESM23). Break and hold above 3920 would target 3955, Friday’s opening price and the MA200. Break and hold above 3955 would target the resistance area from 3995 to the Weekly Extreme High 4040, where selling activity can be expected. It’s worth noting that both the short-term value (5-day VPOC) and the medium-term value (20-day VPOC) are closely linked to this resistance area.
Holding below 3920, indicating a sustained state of weakness, would target the 3862.75, which is the settlement from the March contract (ESH23). It's recommended to mark 3862.75 on your chart as roll gaps typically get filled eventually. The 20% correction level of 3847 is also nearby. Break and hold below 3847 (”bear market” territory) would target the support area from 3800 to the Weekly Extreme Low 3755, where buying activity can be expected.
🟩 Upside: 3955 | 3995 | 4040 | 4080 | 4125 | 4165
🟥 Downside: 3862 | 3847 | 3800 | 3755 | 3690 | 3655
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. Twitter: @smashelito | FAQ: smashelito.com
Thank you Smash!
Thanks so much Smash. I'm sorry to be asking you again as you have touched this topic in the past: so do you use continuous contract?