ES Weekly Plan | March 6-10, 2023
My expectations for the week ahead.
🟩 Daily: OTFU | Ends: 3998
🟥 Weekly: OTFD | Ends: 4053
🟨 Monthly: BALANCE | 3 month | H: 4208.50 L: 3814.50
Weekly Extreme High: 4165
Weekly Extreme Low: 3935
As usual, a detailed daily plan will be published tomorrow.
During the initial three days of the previous week, the sellers were in command, as each attempt at a rally was met with selling pressure. The daily chart was forming lower highs and lower lows as it approached the High Volume Node (HVN) located on the composite volume profile to the far right. In the previous weekly plan, we discussed about how sellers aimed to gain acceptance below the High Volume Node. Traders who monitor Fibonacci levels noticed that the 61.8% level from the recent swing aligned with the MA200. It is worth noting that the sellers were unable to achieve a daily close below this level. Thursday witnessed a shift in the pattern of lower highs and lower lows when an outside day up was observed after the sellers were unable to maintain the true gap down. The buyers capitalized on this by continuing the upward trend on Friday, leading to a trend day up with multiple distribution.
For this week, the main focus will to be on whether the buyers can establish acceptance within the prior 3 week balance area to negate the breakdown that occurred two weeks ago. The daily is OTFU after Friday’s multi-distribution trend day up, which effectively erased eight days' worth of selling. The weekly is technically still OTFD since buyers failed to breach the high of the week before, but if we take a look at the chart, we can clearly see that we are in a two week balance area. The monthly has returned to a 3 month balance, which is a noteworthy accomplishment for sellers. However, the lack of follow-through to the downside was disappointing for sellers. This week's support and resistance areas hold great significance. It is imperative for the sellers to protect the resistance area, which contains two weekly VPOC levels. Likewise, it is crucial for the buyers to defend the support area to avoid any potential testing of the weak area below.
The weekly level of interest is 4020, which is essentially where change took place on Friday’s session. It is worth noting that this level is closely connected to the daily high printed during the January CPI data release (4018.50). Holding above 4020 would target 4075, the opening level from the 2/17 session. That session opened with a true gap down, which remained unfilled (4097.25). Break and hold above 4075 would target the resistance area from 4125 to the Weekly Extreme High 4165, where selling activity can be expected. Note that 4125 is the medium-term value (20-day VPOC), which can act as an upside magnet.
Break and hold below 4020 would target the support area from 3975 to the Weekly Extreme Low 3935, where buying activity can be expected. This support area is aligned with the lower end of the range that was observed in the last two weeks.
🟩 Upside: 4075 | 4125 | 4165 | 4220 | 4255 | 4300
🟥 Downside: 3975 | 3935 | 3880 | 3847 | 3785 | 3730
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