ES/MES Weekend Prep Dec 22
Updated
Last week saw major liquidation with late longs going into FOMC. Thursday was an inside day followed by weakness in the overnight session going to into PCE Friday morning.
Going into this week, I will use Friday's range as a guide. Friday's low during RTH 5898.50 as the halfback of the PCE data release candle, Election Day RTH low and November VAL, including the after hours wick on FOMC. Friday's high is at a LVN from last week and #2 and #3 single prints that were formed from the FOMC sell.
If we trade lower first, focus should be placed around 5966, and 5945-5931. 5966 as last week's VAL and 45-31 as Thursday's Spike Down. Buyers will want to defend this or risk Friday's low. A look below and fail of the spike bottom 5931.75 and Friday's low should be considered for new longs.
Further weakness will see London's low from Friday morning followed by the election gap fill at 5813.25. This would also align with Friday's range 50% extension. If we trade down here, buyers most likely will appear at or near the gap fill. So shorts should be mostly covered by then.
If we trade higher first, buyer will need to build support above Friday's high and target the single prints above 6091.50-6118.50. 6079.25 is the FOMC event candle low. Acceptance above opens FOMC high at 6137.25. Further acceptance opens 6186 - the back-adjusted ATH.
I would be cautious of a look above and fail of Friday's high triggering shorts. If so, shorts will need back below 6000 and 5982 to pick up steam.
FOMC Vwap: 5981.25
FOMC Event Candle: 6079.25-6137.25
Spike 12/19 - Base: 5945.5, bottom: 5931.75
Weekly Expected Move: 90pts - 5907 / 6086
Dec 23 Expected Move: 47pts - 5949 / 6044
Expected moves are based on what the options market has priced in as implied risk for that period. There is a 68% chance price remains within that range by the following close. If price moves outside the range, it is common to revert and close back within.
Going into this week, I will use Friday's range as a guide. Friday's low during RTH 5898.50 as the halfback of the PCE data release candle, Election Day RTH low and November VAL, including the after hours wick on FOMC. Friday's high is at a LVN from last week and #2 and #3 single prints that were formed from the FOMC sell.
If we trade lower first, focus should be placed around 5966, and 5945-5931. 5966 as last week's VAL and 45-31 as Thursday's Spike Down. Buyers will want to defend this or risk Friday's low. A look below and fail of the spike bottom 5931.75 and Friday's low should be considered for new longs.
Further weakness will see London's low from Friday morning followed by the election gap fill at 5813.25. This would also align with Friday's range 50% extension. If we trade down here, buyers most likely will appear at or near the gap fill. So shorts should be mostly covered by then.
If we trade higher first, buyer will need to build support above Friday's high and target the single prints above 6091.50-6118.50. 6079.25 is the FOMC event candle low. Acceptance above opens FOMC high at 6137.25. Further acceptance opens 6186 - the back-adjusted ATH.
I would be cautious of a look above and fail of Friday's high triggering shorts. If so, shorts will need back below 6000 and 5982 to pick up steam.
FOMC Vwap: 5981.25
FOMC Event Candle: 6079.25-6137.25
Spike 12/19 - Base: 5945.5, bottom: 5931.75
Weekly Expected Move: 90pts - 5907 / 6086
Dec 23 Expected Move: 47pts - 5949 / 6044
Expected moves are based on what the options market has priced in as implied risk for that period. There is a 68% chance price remains within that range by the following close. If price moves outside the range, it is common to revert and close back within.
Note
Follow the live chart here: Updated daily. tradingview.com/chart/f8EEzTyy/Trade active
From the plan: If we trade lower first, focus should be placed around 5966, and 5945-5931. 5966 as last week's VAL and 45-31 as Thursday's Spike Down.
First area for longs met at 5966 and now at 6110
Trade closed: target reached
49pts. Down to runners. Note
Runners now 60pts. Congrats for taking the long from previous week VAL
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