Week Ahead 23-29 January 2023
Welcome to the Week ahead.
I have decided to make a transition from video format to written format. This way, I can point out the important levels I write down in my trading plan without any unnecessary distractions.
Before we get into the plan for the next week, if you want to receive every Week ahead as it is written down during the weekend, make sure to either subscribe to the substack or pick up the Tradingriot Bootcamp, which will give you not only access to these market updates but also over 10 hours of video content and private discord.
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Calendar
In terms of news, we can expect a slower week before FOMC and NFP in the first week of February.
Pay attention to volatility during PMI, GDP and PCE, but these events only provide small lower timeframes price spikes rather than bigger market shifts.
Bitcoin
Cryptocurrencies have been in a strong trend since the start of the year without any signs of a pullback.
Towards the end of the previous week, Bitcoin broke outside the composite range that formed from June till November and was previously broken down on FTX crash.
BTC is currently capped at minor composite POC, which will be my first line in the sand for the upcoming week.
If we continue in a one-sided fashion as we did so far in 2023, I will target $25,00 as the end edge of the low volume node and prior daily swing high.
Bare in mind that if momentum is really strong, the move from $25,000 to $28,000 can happen really fast due to a lack of volume between those two price points.
Ideally, I would like to see a pullback into the $21,600 area, which is the edge of the high-volume node and prior consolidation.
Based on how the market left this level, I would prefer a patient approach and waiting for signs of strength rather than bidding on this area blindly.
The $21,665 level will play a key pivot for me on a possible trend failure to the upside and rotation lower if we fail to reclaim it.
On the downside, my first target would be a minor composite POC at $20,071.
If there will be no pullback whatsoever, pay attention to $23,000 for a flip to the upside.
If this is the case, I would still want to see any quick stop run or absorption at local lows before bidding.
Main pivots for the week:
HVN edge: 21576 – important level for trend continuation
mcPOC: 23054 mid-term level
LVN: 25206 to 28547 – if the market accepts above 25206, a sharp move to 28.5k is very likely to happen
mcPOC: 20071 first target if we fail under HVN edge at 21576
Ethereum
ETH respected the composite structure very well throughout the whole run, ranging inside the HVN and quickly trending in the LVN.
Towards the end of the week, we have finished the HVN rotation and stopped at the top edge after taking the November high at 1680.
This puts ETH at the spot where expecting a pullback seems reasonable, at least for the short term.
The first target sits at $1565 with the composite POC and consolidation before the rally happened.
The $1565 area would be the first level to look for bids, same with BTC, the way the move happened, I would prefer to see a deeper pullback first and then bid on confirmed strength.
If we are truly in “up only” mode and this market continues higher, I would wait for acceptance above 1680 to bid towards 1788, which is a higher timeframe poor high level.
The level that “must hold” on the bottom side is the edge of the high volume node at 1501 and acts as a daily cluster, also sitting at 100 daily EMA.
Main pivots for the week:
HVN top: 1680 – acceptance above takes us towards 1800
composite POC: 1565 bounce level to look for longs
HVN bottom: 1501 must hold for the trend to sustain.
Daily resistance: 1788, first target for longs above 1680
ES
ES finished the week strong as it bounced from the composite POC and general S/R level.
Based on the close, I would expect another test of the 4036 area coming in the new week.
On a lower timeframe, we have poor highs at the high of the week, which increase the probability of the test above.
For me, this will be a key pivot to look for either mean reversion or continuation next week.
If we roll over back towards composite POC at 3916, I won’t bid this level blindly as this could be seen as the third test of support, and a break is likely to happen.
Acceptance under 3916 opens the possibility of moving down to 3792, which is the next key support.
Main pivots for the week:
HVN top: 4036 – break and acceptance above targeting composite POC at 4182, pay attention to 2022 vwap at 4117
Composite POC: 3916 can be seen as support tested twice, not a strong level to bid blindly.
HVN bottom: 3792 – key daily support, very flat lows, likely to get tested on downside movement
That’s it for the week. I wish you happy trading.
