Week Ahead 20th – 26th February 2023
Welcome to the Week ahead.
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Calendar
We are kicking off a new week with a Bank holiday in the US.
Throughout the week we have high-impact news on each day, namely PMI, FOMC, GDP and PCE.
Although these do not have the same calibre as the CPI, NFP or FOMC with Powell speaking, we can expect some volatility around them.
Bitcoin
As mentioned in the post from last week, we had a strong reaction on BTC from the 21k area during the CPI and BTC managed to rally to new highs.
Ending the week with an SFP at 25k highs, which failed to bring any follow-through to the downside.
Over the weekend we had a large inflow of call options that expire on February 24th with a strike price of 26k.
Like the call options at 22k, I talked about, we can expect this price point to act as a pivot this week.
From the LTF perspective market is at a tricky spot as it is clearly over-extended at the moment so for any bullish continuation you don’t really want to see much of a pullback.
If the market manages to trade above 25k again, I will be watching for the reaction around 25-26k, following the same rules I shared in past posts on footprint charts.
If we accept above 25k, there is a large LVN all towards the 28k to fill.
On the subsequent failure above 25k, levels of interest for the downside are 23832 and 22989.
Main pivots for the week:
HVN edge @ 25215.4 – a key level that acted as resistance. The market is currently consolidating under it, which is generally a sign of strength.
24th February Call Option OI @ 26000 – levels of large open interest in options act as a magnet for price.
Minor HVN edge @ 23832 – Current weekly low and first level of possible support
POC @ 22989 – Next downside target, notice very thin and one-sided price action surrounding it; if we sell off there, I would expect a much deeper swing to the downside.
Ethereum
Compared to BTC, which still sits under the edge of HVN, ETH managed to break above, which should theoretically make it a better long opportunity.
From the LTF perspective, this breakout outside of the resistance means that you don’t want to see much deeper pullbacks, as the market should show strength immediately.
Holding above the HVN at 1679 should take us to 1788 – 1800, which is an HTF S/R level and the same as with BTC, the level with a large OI surge for options that expire on the 24th.
Break to the downside would take us back to POC at 1562 and eventually back to HVN at 1500.
Main pivots for the week:
HVN top @ 1679 – key level to hold for trend continuation
Price S/R 1788 and option OI at 1800 – first upside target
POC @ 1542 – first target to the downside.
ES
ES has been very messy in the last month as the volatility moved more towards crypto.
Because of that, I will keep the analysis of ES very straightforward as we are approaching an interesting level on LTF.
At 4026, we have a support area that sits right at the HVN edge.
I would bid this level blindly but wait for a QM reversal paired with footprint absorption.
Main pivots for the week:
HVN edge / S/R @ 4026 – Area for possible long play
HVN @ 4120 – Long target
POC @ 3916 – If we break through the HVN at 4026, I would be looking for possible shorts to 3916
That’s it for the week. I wish you happy trading.
