ES Weekly Plan | May 27-31, 2024
My expectations for the upcoming week.
Visual Representation
Market Structure
🟨 DAILY: BALANCE | 8D | H: 5358.25 L: 5273.50
🟩 WEEKLY: OTFU | ENDS: 5273.50
🟩 MONTHLY: OTFU
Contextual Analysis
During the previous week, our main focus was on the double distribution from the week before, particularly its upper distribution that formed a 3-day balance area. From Monday through Wednesday, the market saw responsive two-sided activity within this daily balance, while Thursday's session attempted a breakout. However, this breakout failed, triggering a counter-move in the opposite direction and resulting in an outside day down. The unfilled gap at 5274.25 was filled during this process; however, the market rejected the weekly lower distribution, indicating that buyers maintain firm control. Friday’s session resulted in an inside day. The last notable outside day occurred on April 4th, and we can observe how the market remained within that range for a couple of sessions before a directional move unfolded. The medium-term value (20D VPOC) has shifted higher, from 5245 to 5324. We carry forward the overnight ATH at 5368.25, which remains untested in RTH.
For this shortened week, the main focus will be on Thursday’s highlighted outside day down, which marks the extremes of the current multi-day balance area. The general guideline suggests going with the break of the multi-day balance area and monitoring for continuation (acceptance) or lack thereof (rejection). If there is a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction, as demonstrated last week. Needless to say, responsive activity is expected within the balance area, emphasizing the importance of staying nimble. Contextually, the overall picture remains unchanged from last week with buyers maintaining control by establishing value at higher prices. For a potential shift in tone, sellers must achieve a balance breakdown, effectively putting an end to the weekly one-time framing up.
The weekly Smashlevel (Pivot) is 5323, representing both the prior 2-month balance high and the prior all-time high (ATH). If you recall, my models identified 5323 as a significant level, highlighted in the Weekly Plan for March 11-15. Break and hold above 5323, signaling strength, would target the 8-day balance high at 5358. Break and hold above 5358 would indicate a successful breakout, targeting the resistance area from 5395 to the Weekly Extreme High of 5420, where selling activity can be expected.
Holding below 5323 would target the 8-day balance low at 5274. Break and hold below 5274 would indicate a successful breakdown, targeting the support area from 5250 to the Weekly Extreme Low of 5225, where buying activity can be expected. Additionally, a break below 5274 would end the weekly one-time framing up.
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.
Break and hold above 5323 would target 5358 / 5395 / 5420* / 5450 / 5475
Holding 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.
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