Welcome to this week’s plan. Inside, you’ll find a quick review of last week’s price action, key economic events, market structure, context for the week ahead, and the levels I’ll be focusing on. Let’s get prepared.
Contents
Last Week in Review
Economic & Earnings Calendar
Market Structure
Contextual Analysis & Plan
Key Levels of Interest
Last Week in Review
Last week’s plan:
Last week kicked off with weakness on Monday, with sellers breaking below the key 7772 level (see Figure 1). Failure to defend 7772 was short-term bearish, opening the door to filling the bull gap at 7718, as outlined in last week’s plan.
“If we open with weakness, the key for buyers will be to defend last week’s VPOC at 7772, a high volume node (HVN) below which Thursday’s weakness failed to gain acceptance. Failure to defend this area would be short-term bearish and open the door to a fill of Monday’s bull gap at 7718, the lower balance extreme.”
The bull gap at 7718 was filled on Tuesday, where responsive buyers stepped in during both the overnight and RTH sessions (see Figure 2). As the auction was approaching 7718 overnight, we could observe notable order flow activity before the reversal (see Figure 3).
Both the 7772 and 7718 levels continued to be important on Wednesday, with downside being capped by 7718 overnight, followed by upside being capped by 7772 during the RTH session (see Figure 4).
The auction formed a downward spike in the M-period after a notable liquidation break, creating a disconnect between price and value. The key heading into Thursday was to monitor whether sellers were able to build value within the spike area or whether failure to do so would trigger a reclaim of the spike base at 7747.
On Thursday, the auction was working through the fills of the poor structure created by the liquidation break early overnight (see Figure 5). However, buyers were ultimately unable to find acceptance above 7747, leading to continued weakness during RTH. The auction came a few handles shy of the weekly support area between 7670 and 7640, tagging the MA50 before reversing higher and closing back within Wednesday’s spike area (see Figure 6).
Wednesday’s spike area between 7747 and 7709 remained the key area of focus heading into Friday’s session. Reclaiming 7747 would signal strength, while a break below 7709 would maintain downside pressure. Buyers reclaimed 7747 overnight and successfully built value above it. This was followed by upside continuation post-NFP, clearing all upside targets toward 7794 (FUT) (see Figure 7).
While the RTH session opened with a true gap higher that remained unfilled, the session itself lacked directional conviction, forming an afternoon rally high at 7783, which serves as an immediate reference for gauging the state of the auction early next week.
Looking at the weekly levels, the upside was capped by 7772 early in the week, triggering some weakness, but ultimately sellers were unable to find acceptance below 7718, leading to a reversal.
Weekly Levels in Review
Economic & Earnings Calendar
Market Structure
🟨 Daily: BALANCE | 5-Day | High: 7810.25 / Low: 7672.75
🟨 Weekly: BALANCE | 8-Week | High: 7848.50 / Low: 7575
🟩 Monthly: OTFU | Ends at: 7575
Balance: A market condition where price consolidates within a defined range, reflecting indecision as the market awaits more market-generated information. We apply balance guidelines, favoring fade trades at range extremes (highs/lows) and preparing for breakout setups if balance resolves.
One-Time Framing Up (OTFU): A market condition where each subsequent bar forms a higher low, signaling a strong upward trend.
One-Time Framing Down (OTFD): A market condition where each subsequent bar forms a lower high, signaling a strong downward trend.
Contextual Analysis & Plan
For this week, the main focus will be on whether buyers can sustain the upside momentum after holding the MA50 on Thursday and following through with Friday’s true gap higher.
Although the gap at 7741 remained unfilled, Friday’s price action lacked meaningful directional conviction, with the session ultimately closing below its opening print.
If we open with strength, the key for sellers will be to defend Friday’s afternoon rally high at 7783, which closely aligns with last week’s VAH (7782). Failure to defend this area would set the stage for a revisit of the multi-week balance high at 7848, while SPX and SPY challenge their respective ATHs.
If we open with weakness, the key for buyers will be to defend Friday’s true gap at 7741, which closely aligns with last week’s VWAP (7745). Failure to defend this area would be short-term bearish and open the door to revisit the HVN at 7690.
The weekly Smashlevel is 7783, Friday’s afternoon rally high, aligning closely with last week’s VAH. Break and hold above 7783 would be short-term bullish, targeting the prior and current ATHs at 7838 and 7848. Acceptance above 7848 would signal strength and open the door to bullish continuation toward the resistance area between 7920 and the Weekly Extreme High at 7950, where responsive sellers can be expected.
This resistance area coincides with SPX 7900, where upside momentum could potentially stall as the auction moves into uncharted territory. Keep in mind that while ES printed a new ATH at 7848 two weeks ago on the continuous contract, SPX (7,816.70) and SPY (779.37) have yet to do the same.
Holding below 7783 would be short-term bearish and target the unfilled bull gap at 7741. Acceptance below 7741 would signal weakness and open the door to bearish continuation toward 7690, as well as the support area between 7650 and the Weekly Extreme Low at 7620, where responsive buyers can be expected.
This support area coincides with the prior multi-week balance high, which also serves as a composite low volume node (LVN), making it a crucial area to defend. Failure to do so would once again open the door to a return to the HVN at 7440.
Visual Representation
Key Levels of Interest
In the upcoming week, I will closely observe the behavior around 7783.
Break and hold above 7783 would target 7838-48 / 7920 / 7950* / 8000 / 8040
Holding below 7783 would target 7741 / 7690 / 7650 / 7620* / 7598
*Weekly Extremes (defined by proprietary models). I exercise caution when initiating trades outside the Weekly Extremes to avoid impulsive decisions at unfavorable locations. Essentially, the Weekly Extremes act as a safeguard against emotionally-driven trades, which is far from ideal for making well-informed decisions.
As usual, a detailed Daily Plan will be posted tomorrow. Hope you all enjoy the rest of the weekend!
Thank you so much Smash!
Thanks Smash!