ES Weekly Plan | November 6-10, 2023
My expectations for the upcoming week.
Visual Representation
Market Structure
🟩 DAILY: OTFU | ENDS: 4358.75
🟨 WEEKLY: BALANCE | 5W | H: 4423.25 L: 4122.25
🟥 MONTHLY: OTFD | ENDS: 4423.25
Contextual Analysis
During the previous week, the market experienced a significant rally, characterized by three gaps higher, that remain unfilled. Consequently, the weekly profile formed a triple distribution, reflecting the market's emotional nature. The rally originated from the high volume node (HVN) on the YTD volume profile, which was the big downside magnet for the correction. Sellers failed to defend the prior Weekly Extreme High of 4265, resulting in a vicious squeeze. It's worth emphasizing that Friday's session came within 30 handles of the Monthly Extreme High at 4418, a notably significant development for this early stage in November.
For this week, the main focus will be on the weekly balance area, specifically its upper end, which represents a prior area of balance. The general guideline suggests going with the break of the highlighted 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. The previous week’s VPOC is located at 4190, which is 186 handles below Friday's settlement. This implies that an immediate breakout may not be the most favorable scenario for buyers, who would prefer to see some consolidation before a potential upside continuation. The previous week formed a triple distribution, and buyers are not facing significant trouble as long as acceptance is not established within the lower distribution. Such scenario would put the previous week’s rally into question.
The weekly level of interest is 4383, which represents Friday’s initial balance high. Break and hold above 4383, indicating continued strength, would target the Monthly Extreme High (November) at 4418, located at the upper end of the 5-week balance area. Break and hold above 4418, would both shift the weekly to one-time framing up and put an end to the monthly one-time framing down, targeting the resistance area from 4445 to the Weekly Extreme High of 4475, where selling activity can be expected. Note how this resistance area coincides with the lower end of a previous week’s upper distribution, where the unfilled daily gap at 4446 is located.
Holding below 4383 would target the lower end of the previous week’s upper distribution at 4360. Break and hold below 4360 would put an end to the daily one-time framing up, and target the unfilled daily gap at 4337.75. Established acceptance within the previous week’s middle distribution would target the support area from 4305 to the Weekly Extreme Low of 4275, where buying activity can be expected. Note how this support area coincides with the Monthly VWAP and MA200.
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 4383.
Break and hold above 4383 would target 4418 / 4445 / 4475* / 4499 / 4525
Holding below 4383 would target 4360 / 4337 / 4305 / 4275* / 4264 / 4240
*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.
Mr Smash, the last 3 trading days on your chart show a gap between Close and Open.
Do you only plot RTH on your charts and use no data from ETH for analysis?
Great content. Thank you.