ES Weekly Plan | March 18-22, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟥 DAILY: OTFD | ENDS: 5201. 75
🟩 WEEKLY: OTFU | ENDS: 5157
🟩 MONTHLY: OTFU | ENDS: 4874.50
Contextual Analysis
During the previous week, I transitioned to the ESM24 (June) contract. As I refrain from back-adjusting my charts and keep historical prices unchanged, the presentation of my charts will diverge from those that undergo back-adjustment. This choice is rooted in personal preference, as there is no definitive right or wrong approach in this matter; both methods have their respective pros and cons. As short-term traders, the impact is minimal as we navigate this market day by day, and our weekly targets remain the same, irrespective of the chosen method.
The prior weekly Smashlevel was at 5192, and a glance at the chart reveals its pivotal role throughout the previous week. Despite breaching the 5192 level on Tuesday and establishing value above it through Wednesday and Thursday, sellers managed to close out the week below it on Friday.
For this week, the main focus will be on whether the sellers can follow through to the downside following Friday’s move away from the three closely clustered daily highs, which we carry forward as unfinished business. The strongest response from sellers would involve establishing acceptance below the previous week’s low of 5157, signaling a change in tone, as they have not been able to gain traction below a previous week's low for months. Failure to do so would confirm that the weakness observed in the second half of the last week was primarily driven by long liquidation rather than stronger sellers, which would then open the door for a cleanup of the unfinished business above.
The weekly Smashlevel (Pivot) is 5193, representing the prior 2-week balance high. Break and hold above 5193 would target high made during the CPI data release at 5221. Break and hold above 5221 would target the resistance area from 5260 to the Weekly Extreme High of 5290, effectively cleaning up the unfinished business, where selling activity can be expected. The 100% range extension from the prior 2-week balance area is situated at 5323, in the case of continued strength. Additionally, the 5323 level holds significance according to my models, making it worth monitoring closely moving forward.
Holding below 5193 would target the previous week’s low and a prior weekly VPOC at 5157 and 5155, respectively. Acceptance below 5155 would target the support area from 5115 to the Weekly Extreme Low of 5085, where buying activity can be expected. Note how this support area coincides with the medium-term value (20D VPOC). 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.
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 observe 5193.
Holding above 5193 would target 5221 / 5260 / 5290* / 5323 / 5355
Break and hold below 5193 would target 5155 / 5115 / 5085* / 5063 / 5030
*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 for the write up Smash
Thanks, pal! Here's to an awesome and uplifting week ahead!