Week Review and Weekly Outlook Aug 28 - Sept 1
A fable of 4400.
The Joker - Weekly Wrap Up
Image 1. Le Fou. Tarot.
An inside week resulted in weekly balance as both sides await further market generated information (MGI). Buyers managed to see Friday settle at 4416 despite volatility the same day making new lows on the week. A fine way to wrap up two days of meetings at Jackson Hole - it is increasingly suggestive that the market has detached itself from central bank messaging to a greater extent than the prior year. Neither side is in control as the dust settles from an eventful week.
Meanwhile the weekly profile reveals two distributions, the lower containing short-term value (5-day) at 4402, and the smaller upper distribution above LVN 4433 and WVAH 4425. Buyers will look to see a daily close above this LVN for a possible continuation higher. Sellers will look spend time below value to break 4365 and close below 4350 for possible price discovery to the downside.
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Image 2. Prior week profile, short-term value
Longer-term value (20D) has come down to 4493 A clear LVN at 4430 at this timeframe is further evidence for an important battle zone for either side and reinforcing last week’s main levels. The 20D VAL at 4410 is a level which buyers likely want to defend early on in the week - a lack of interest at this level will likely see more time spent below 4400 and possible tests of the last two weeks’ lows.
Levels Next Week
Two important levels next week are 4385 and 4430 - these could open the way to the next 100 points on either side (not necessarily this week!). There is clear sell side liquidity below the former, and the latter represents the confluence of weekly and monthly LVNs and as described above. The reference pivot is 4410, or the monthly VAL. Plan largely unchanged from prior week.
Sellers will want to see VIX close above 18 for downside momentum. Buyers would want to see oil (CL) supported at 80 as well as AAPL over 181 for risk-on.
4493 20D POC
4486 PWH (end weekly OTFD)
4447 Buyside liquidity
4430 monthly LVN
4410 weekly pivot
4365.25 PWL
4327.5 / 4325.50 June contract gap (LIS)
4306 prior balance highs
4290 weekly balance POC
a) Buyers with a daily close over 4430 can then target 4450, 4470. A close above the latter can see a break of weekly OTFD over 4486, targeting 4507.
b) Daily close below 4385 can see a test of lows at 4350. A successful break would could continue momentum to then target 4327 and 4306 early June balance highs. Trade under 4300 could see an ultimate target area of 4282-90.
Profile Landscape
A zoomed out view of balance areas representing buyer and seller magnets. Note the gap below 4350 to the contract gap which would represent a major seller victory. NPOCs 4290 and 4229 are longer-term targets. Meanwhile buyers will aim to reclaim 20D value at 4493 to once again target prices over 4500.
Image 3. Balance profiles from June-August
