Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 5126.75
🟨 WEEKLY: BALANCE | 3W | H: 5213 L: 4991.25
🟨 MONTHLY: BALANCE | 2M | H: 5322.75 L: 4991.25
Contextual Analysis
During the previous week, buyers successfully ended the weekly one-time framing down by breaching the high of the inside week on Monday, bringing the weekly back to balance. However, the inside week breakout resulted in a failure, triggering a move in the opposite direction. The subsequent weakness led to a test of the weekly support area ranging from 5040 to 5010, where buying activity was observed. Buyers managed to close out the week strongly following a large true gap up on Friday, which we are now monitoring for continuation or lack thereof.
For this week, the main focus will be on whether the buyers can maintain the upside momentum initiated by Friday’s gap above the high volume node at 5103. Monitor for continuation (Acceptance) or lack thereof (Rejection). Observing last week’s volume profile, we can quickly see that its main distribution was established above the two prior weekly value areas, now our short-term area of interest. The strongest response from the market would involve maintaining within this distribution, favoring further upside. Failure to do so would open the door for filling the gap at 5100.75. The weakest response would be filling the gap with acceptance back within Thursday's range, effectively rejecting Friday's strength.
The weekly Smashlevel (Pivot) is 5147/5127, representing the lower end of the previous week’s main distribution. Holding above 5147/5127, signaling strength, would target the prior 3-week balance low of 5194, effectively cleaning up the poor structure from the 4/15 trend day in the process. Break and hold above 5194 would target the resistance area from 5230 to the Weekly Extreme High of 5260, where selling activity can be expected. Take note of the high volume node (prior 20D VPOC) within this resistance area.
Break and hold below 5147/5127 would target the unfilled daily gap at 5100.75, coinciding with the medium-term (20D VPOC) and long-term (90 VPOC) value. Break and hold below 5100.75, signaling weakness, would target the support area from 5075 to the Weekly Extreme Low of 5045, where buying activity can be expected. This support area is crucial for buyers to maintain to avoid a deeper correction.
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 5147/5127.
Holding above 5147/5127 would target 5194 / 5230 / 5260* / 5294 / 5323
Break and hold below 5147/5127 would target 5100 / 5075 / 5045* / 5010 / 4977
*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.
Thank you, Smash!