ES Weekly Plan | May 20-24, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟨 DAILY: BALANCE | 3D | H: 5349 L: 5286.75
🟩 WEEKLY: OTFU | ENDS: 5233.25
🟩 MONTHLY: OTFU
Contextual Analysis
During the previous week, the market continued its weekly imbalance phase to the upside. The primary upside target was the unfinished business at the all-time high, which was successfully cleaned up following Wednesday’s true gap higher. The prior ATH coincided with the monthly balance high, which has since shifted to one-time framing up after the break. However, the upside momentum stalled after tagging the Weekly Extreme High of 5340 (HOD: 5349), resulting in a pullback on Thursday and Friday, As always, keep the weekly targets close at hand to avoid making emotional trades at potentially poor locations.
The outcomes from the past three weeks demonstrate the power of the Weekly Extremes.
For this week, the main focus will be on the previous week’s double distribution profile, which formed after Wednesday’s true gap higher, ultimately leading to a new all-time high (ATH). Consequently, the monthly is one-time framing up, along with the weekly time frame. The upper distribution has formed a 3-day balance area following the pullback observed on Thursday and Friday, which is of interest in the short-term. The most bullish response from the market would involve maintaining within the upper distribution, further accepting Wednesday’s directional move, which would set the stage for an upside continuation. The less bullish response would involve filling the gap at 5274.25, but rejecting the lower distribution. The weakest response would be to establish acceptance back within the lower distribution, which would put last week’s strength into question.
The weekly Smashlevel (Pivot) is 5323, representing both the prior 2-month balance high and the all-time high (ATH). If you recall, my models identified 5323 as a significant level, highlighted in the Weekly Plan for March 11-15. Holding above 5323, signaling strength, would target a 3-day balance breakout toward 52360. Acceptance above 5360 would then target the resistance area from 5395 to the Weekly Extreme High of 5420, where selling activity can be expected. Take note of the 100% range extension from the 3-day balance area at 5411.
Break and hold below 5323 would target a 3-day balance breakdown toward the unfilled gap at 5274.25. Acceptance below 5274.25 would then target the support area from 5250 to the Weekly Extreme Low of 5225, where buying activity can be expected. Take note of the 100% range extension from the 3-day balance area at 5225, along with the medium-term value (20D VPOC) at 5245.
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 5323.
Holding above 5323 would target 5360 / 5395 / 5420* / 5450 / 5475
Break and hold below 5323 would target 5274 / 5250 / 5225* / 5200 / 5166
*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.