Bullish Ahead of WWW: Wed of Week Before Options Exp Week

What a difference a week can make. Most of our models are on buys now, even with the weakness we saw on Friday.

This coming week’s Wednesday is WWW, which is the Wednesday of the week before options expirations week. I highlight this event every month. Usually we get some kind of weakness into WWW, which then sets up a move higher into monthly opex which falls on Feb 21st this month. So if we get some more weakness/sideways action into Wednesday of this coming week, we should be looking for bottoming action setting up a long trade into the latter half of February.

With our micro1 indicator going to a buy early in the week, we are long and we can continue to hold longs as long as the micro1 buy signal is maintained -- as usual, no need to overthink this. Just follow the signals and stay long as long as it supports the trade. 

ES Grey Zone areas:  The grey zones on the ES 5 min chart below are what I draw in on a discretionary basis.  They are support and resistance areas which the market is most likely to react from. If we test a zone from below, it is likely to be rejected and fall lower to test support zones below. If we test a zone from above, it is likely to take support there and begin a move higher. So these zones can be used for intraday trading and/or as entry points for positioning for swing trades. These zones are drawn in based on what the market has done there previously both on smaller and larger timeframes.

Grey zone resistance at at 3350-58 and 3374-80. Support is at 3319-12, 3295-88,  and then at 3270-63 area.  

Daily pivot is at 3331. Resistance R1 is at 3342 and R2 at 3360.5. Support S1 is at 3312.5 and S2 at 3302. 

All the best to your trading week ahead.

Princely Mathew hosts The Smart Money premium service at ElliottWaveTrader.