ES Weekly Plan | November 20-24, 2023

My expectations for the upcoming week.

Visual Representation

ES Weekly Plan | November 20-24, 2023

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Market Structure

🟨 DAILY: BALANCE | 4D | H: 4536.75 L: 4483.75
🟩 WEEKLY: OTFU | ENDS: 4407.25
🟨 MONTHLY: BALANCE | TBD

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Contextual Analysis

During the previous week, the market kicked off with a relatively calm Monday session, anticipating the release of CPI data. Come Tuesday, a positive response to the CPI data set the stage for the RTH session to open with a significant gap higher. Consequently, all weekly upside targets, including the Weekly Extreme High of 4525, were achieved—a noteworthy accomplishment given the early stage of the week. Note the challenges buyers encountered in gaining meaningful upside traction above the 4525 level, even with the momentum generated by the breakout. This underscores the importance of exercising caution when entering trades outside the Weekly Extremes to prevent emotional reactions from taking over.

Outcome from ES Weekly Plan | November 13-17, 2023

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For this shortened holiday week, the main focus will be on the 4-day balance area, ranging from 4483.75 to 4536.75. The upper extreme of the balance area has unfinished business, characterized by a poor high and untested overnight activity, while the lower end is marked by excess. The general guideline suggests going with the break of the daily balance area and monitoring for continuation (Acceptance) or lack thereof (Rejection). If there's a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction. Overall, buyers are not facing significant trouble as long as the weekly support area is maintained—trouble would arise if acceptance is re-established within the prior 5-week balance area.

The weekly level of interest is 4530, which represents the value area high (VAH) from the previous week. Break and hold above 4530 would target a breakout from the 4-day balance area towards 4562, representing the September swing high. Break and hold above 4562 would target the resistance area from 4585 to the Weekly Extreme High of 4615, where selling activity can be expected. Note how this resistance area coincides with the unfilled daily gap at 4591 and the weekly NVPOC at 4604 from the prior 3-week balance area in July. The YTD high is situated at 4633.50, in the case of continued strength.

Holding below 4530 would target the value area low (VAL) from previous week at 4505. Break and hold below 4505 would target a breakdown from the 4-day balance area towards the support area from 4465 to the Weekly Extreme Low of 4435, where buying activity can be expected. Note how this support area coincides with the unfilled daily gap #4 at 4436.75. 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!

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Levels of Interest

In the upcoming week, I will observe 4530.

• Break and hold above 4530 would target 4562 / 4585 / 4615* / 4633 / 4660

• Holding below 4530 would target 4505 / 4465 / 4435* / 4418 / 4396

*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.

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Economic Calendar

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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.