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ES Weekly Plan | October 2-6, 2023
My expectations for the upcoming week.
🟩 Daily: OTFU | Ends: 4311
🟥 Weekly: OTFD | Ends: 4380.25
🟥 Monthly: OTFD | Ends: 4562
Weekly Extreme High: 4445
Weekly Extreme Low: 4220
As usual, a detailed daily plan will be published tomorrow.
During the previous week, sellers successfully breached the 4350 level, thereby effectively shifting both the weekly and monthly to one-time framing down. The ESM23 roll gap was filled in the process. On Wednesday, the prior weekly support area, ranging from 4285 to 4255, was tested and produced a strong bounce. However on Friday, buyers attempted to regain the pivotal 4350 level, but were unsuccessful, resulting in a weekly close below the multi-week trading range.
For this week, the main focus will be on whether the sellers can sustain the directional move away from the prior 6-week balance area following the break and weekly close below the 4350 level. The market is one-time framing down on the weekly and monthly, indicating that sellers are in control of the auction in a broader context. However, it's worth noting that despite a weak performance from buyers on Friday, the daily is one-time framing up. The conditions are quite straightforward: sellers aim to maintain pressure by breaking the pattern of higher lows on the daily for a downside continuation towards the highlighted, significant weekly support area. Conversely, buyers aim to negate last week’s breakdown by re-establishing acceptance within the prior 6-week balance area, with the primary objective to end the weekly one-time framing down.
The weekly level of interest is 4350, which represents the prior 6-week balance low. Break and hold above 4350, indicating a lack of initiative sellers, would target the high of the previous week at 4380. Break and hold above 4380, would put an end to the weekly one-time framing down and target the resistance area from 4415 to the Weekly Extreme High of 4445, where selling activity can be expected. Pay attention to the numerous references converging within the resistance area, including the MA20, MA100, September VWAP, 90D VPOC and the unfilled daily gap at 4446, making it crucial for sellers to defend.
Holding below 4350, indicating a successful breakdown, would target the value area low (VAL) of the previous week at 4305, a level that sellers struggled to gain traction below last week. Break and hold below 4305 would target a downside continuation towards the support area from 4250 to the Weekly Extreme Low of 4220, where buying activity can be expected. Note how this support area coincides with the MA200, the unfilled daily gap at 4239.75 and the upper end of the 8-week balance area from April to June, making it crucial for buyers to defend. There's a significant high volume node (HVN) located at 4135, serving as a potential downside magnet for this correction. This aligns with the 100% range extension from the most recent weekly balance area. Nonetheless, we maintain our day-by-day approach without making anticipations.
🟩 Upside: 4380 | 4415 | 4445 | 4494 | 4523
🟥 Downside: 4305 | 4250 | 4220 | 4170 | 4135
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.