We’re now in weekly balance 5509.25-5770.50. With 3 major events behind us, we should see a clearer picture form in ES. A number of weeks ago we were looking for the ATH balance 200% extension and that arrived back on March 11th and followed a few days later with a look below and fail of that extension marking the potential for a swing low. Since then, we have moved higher bouncing between zones.
Last week we had contract roll, FOMC, and March OPEX. Each of these events saw moves higher with FOMC being the most bizarre honestly. Wednesday saw an explosive move to what is now 2 week balance top reaching into a weekly zone 5769-75 only to have London fade it. Then the following day NY moved us back up to then fade it as well on the same day. Overnight session then took us down into Tuesday’s low nearly sweeping below it at the 5650-55 weekly zone. Price held including with the swing low vwap moving us back above the 5682-88 (slightly adjusted) zone which has proven quite reliable.
Will hold judgement to what Friday’s price action is being a major OPEX. The market was massively short into it and of course rebalancing and dealer adjustments would need to be made. We ended the session with a spike up (base: 5712.25, top: 5722.25). Question now is, can buyers sustain this or do they give up like the so many Monday’s prior?
We need to keep an open mind as the market is still heavily in a down trend, but also realize that we have oversold conditions including the good old trusty seasonality. Buyers have a lot and I mean A LOT of work to do with many areas of resistance now above. Just between 5780-5850 we have 2025 VAL, a prior Friday’s high, ATH VWAP, 200 day SMA, ES January low, SPX January low, 50% fib retracement from ATH. And that is only the next 130pts or so.
Will use Friday’s range as a guide for this week. Friday’s high ended in a spike up where buyers must prove their intent during Monday’s RTH. This area includes Thursday’s overnight highs, FOMC event candle high (30 minute), Monday 3/10 RTH high, and last Monday’s high.
The halfback of Friday’s range includes the major weekly zone 5862-88 (slightly adjusted), FOMC low, last Tuesday’s intraday range top and Friday’s (3/7) low (30 min body candles). In addition, last week’s LVN.
Friday’s low includes the 5650-55 weekly zone, Tuesday’s intraday range low, the prior Friday’s high, swing low VWAP, and CPI halfback.
Acceptance higher above Friday’s high and reclaiming 5726-34 should find it’s way to 5744, followed by the 2week balance top 5769-5775 where I would take most off along the way. Would be cautious if a look above and fail occurs at the balance top or perhaps closer to 5791. If so, 5726-34 would need to hold on any back test for buyers. Above 5780 becomes very tricky and will need to manage carefully. There will be many points of failure that could happen as mentioned above. Out of all of it, I would be heavily focused around 5785-95. 100% Friday extension, 200 day sma, ATH vwap, 3/7 highs.
Trading lower than 5682-88 becomes very worrisome for bulls. Such an important level to hold. Perhaps a quick move down and strong reclaim would be fine. But acceptance lower adding to the lower highs and lower lows would not be peachy. With that said, the swing low vwap will be floating towards 5666-5670 and would include last Tuesday’s intraday halfback and 786 fib of Friday’s session.
Below 5682-88, if rejected from below opens Friday’s low and can create a heavy liquidation with a move to 5635-39 – balance halfback followed by 5606-10 where a single print is also located and finally 5580-85 – the Friday 100% extension. Further weakness is then visit balance bottom.
Weekly Expected Move: 106pts.
I continue to be long bias and have locked in enough coin on swing equity longs to be comfy. However, I do remind myself of the larger picture as discussed in prior plans. Are long term swing long participants going to quietly exit creating a lower high? We have another 200-250pts above us to find out. If you want ATH again, then 5950 area is your key area – reclaiming ATH multi-week balance bottom. But let’s at least get back over the 200 day moving average shall we?