ES (SPX, SPY) Week Ahead Analysis - (Nov 24th - 28th)

Executive Overview

Equity markets, particularly the E-mini S&P 500 (ES), are currently navigating a broader weekly uptrend, yet have entered a phase of short-term correction after encountering resistance around the 6,900 to 7,000 level. Presently, prices hover near 6,660, finding support from a robust pocket in the mid-6,500s.

Recent volatility indices have surged, with the VIX now in the low 20s and the term structure exhibiting a near flat or slight backwardation. Meanwhile, key credit metrics, funding conditions, and spread behaviors remain stable, suggesting that the current market dynamics are more indicative of equity valuation adjustments and positioning realignments rather than a sign of systemic distress.

Looking ahead to the coming week, we anticipate a choppy trading environment characterized by two-sided price movements within a range of 6,520 to 6,780. Intraday strategies are likely to involve selling into strength around resistance levels R1 and R2, while seeking to capitalize on buying opportunities when prices approach support levels S1. Notably, the VIX is expected to remain elevated above its recent teens regime during this period.

A critical point of focus will be the 6,520 to 6,540 support zone. Should this area fail to hold on a daily closing basis, we could see the correction extend toward the 6,420 to 6,450 range, with further downside potential targeting the low-6,300s.

Multi-Timeframe Analysis of Market Structure

Weekly Trend: Premium/Discount

The current market structure remains characterized by higher highs (HH) and higher lows (HL). The last significant upward movement peaked just shy of 7,000, while the ongoing pullback has managed to hold above the previous weekly higher low band, located in the high-5,000s to low-6,000s range. A notable supply zone exists from approximately 6,850 to just above 7,000, identified as a weak high. Below this, a robust demand/value area spans from around 5,850 (at the 1.272 Fibonacci retracement) down to approximately 5,575 (the 2.0 Fibonacci level) from the previous major leg. On this timeframe, the E-mini S&P (ES) is trading at a premium in relation to the substantial 5,800–5,900 weekly value area. However, we have transitioned from momentum-driven expansion to a mean-reverting correction phase.

Daily Trend and Range

Shifting to a daily perspective, the structure has inverted to a short-term downtrend, marked by a lower high established near 6,900, followed by a lower swing low around the 6,520s. Fibonacci retracement levels from the last sell-off align as follows: 1.272 at approximately 6,521, 1.618 at around 6,418, and 2.0 at approximately 6,304. The 6,520s zone is precisely where price action found support. For the upcoming week, the operative daily range can be defined between 6,520–6,540 as the lower band and 6,760–6,780 as the upper band, coinciding with the previous breakdown area and recent four-hour lower high.

Four-Hour Structure

Analyzing the four-hour chart reveals a clear downward impulse from the mid-6,700s lower high to lows in the mid-6,500s, followed by a sharp rebound. A Fibonacci sequence applied to this movement suggests retracement levels of 1.272 at approximately 6,527, 1.618 at around 6,455, and 2.0 at roughly 6,376. These levels coincide with a notable demand block around the 6,520–6,540 range, identified as a "strong low," with additional liquidity found in the 6,450s and 6,370s. The recent upward movement from these lows appears corrective within the broader impulse, indicating a potential lower high is forming under the 6,680–6,700 area. Until price reclaims and maintains this band, the four-hour swing remains in a down-to-sideways trend.

Hourly Context

From an hourly viewpoint, the ES experienced a decline from approximately 6,770 to the mid-6,500s, subsequently establishing a series of higher lows as it grinds upward. Recent hourly activity shows price pressing against an overhead resistance zone located around 6,660–6,670, just beneath the Asia Session high of 6,662.5 and the New York PM high / previous day high at 6,677.5. The volume-weighted average price (VWAP) is situated near 6,609.75, with prior intraday lows clustering between 6,594 and 6,611.75. Intraday, the ES is currently mid-range, confined between support levels at 6,640–6,642 (Asia Session Low) and resistance at 6,662.5–6,677.5 (Asia Session High / New York PM High / Previous Day High / Yearly Value Area High).

Weekly and Daily Oscillators / Momentum

The weekly oscillator has retracted from overbought conditions but remains elevated, signifying a cool-off within a strong uptrend. Conversely, the daily oscillator is currently oversold and beginning to reverse, showing readings in the mid-20s with the first uptick following a significant downturn. This pattern is classic for potential bounces; however, confirmation of a full trend reversal is yet to materialize.

Key levels and zones

Resistance (R-side)

R1: 6,662–6,678
• Components: Asia Session High 6,662.5, NYPM High / PDH 6,677.5, Y-VAH also anchored at 6,677.5, plus a clear 1H/30m shelf.
• Significance: This is the nearest control ceiling; it capped Friday’s rebound and marks the boundary between neutral intraday and more aggressive squeeze potential.
• Role: First place to fade “pop-and-fail” wicks for short A++ plays, and the first area that must be decisively reclaimed for bulls to press a larger squeeze.

R2: 6,760–6,780
• Components: Prior 4H lower high and breakdown zone; 1H HH before the large red impulse bar; sits just below a dense daily supply band.
• Significance: A retest of broken support turned resistance. Acceptance back above here would suggest the entire recent flush was a failed breakdown, opening the path to retest the highs.

R3: 6,895–6,945
• Components: 1H fib extensions 1.272 ≈ 6,895.75 and 1.618 ≈ 6,942.50, plus prior weekly weak high / supply band just under 7,000.
• Significance: This is the larger-timeframe cap. Reaching this zone in one week would likely require either a decisively dovish Fed tone or very strong data.

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Support (S-side)

S1: 6,520–6,540
• Components: Daily fib 1.272 ≈ 6,521.25, 4H fib 1.272 ≈ 6,527.25, recent swing low cluster and strong demand band.
• Significance: This is the primary weekly pivot for the current correction. First major A++ long location if it’s flushed and reclaimed during liquid hours.

S2: 6,418–6,455
• Components: Daily 1.618 ≈ 6,418, 4H 1.618 ≈ 6,455.50, plus a “strong low” label in that region.
• Significance: This is deeper discount inside the current swing, where larger timeframe players would be expected to defend aggressively if the broader uptrend is to remain intact.

S3: 6,304–6,376
• Components: Daily 2.0 ≈ 6,304.00, 4H 2.0 ≈ 6,376.25, lower edge of the current visible demand block.
• Significance: If price reaches here this week, the market is in a full-fledged risk-off extension, but still within the context of the broader weekly uptrend.

S4: 5,850–5,575 (weekly)
• Components: Weekly fibs 1.272 ≈ 5,850.75, 1.618 ≈ 5,721.00, 2.0 ≈ 5,577.50.
• Significance: True structural weekly demand; a tail-risk destination if macro or credit conditions were to deteriorate sharply.

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Volatility Backdrop

The VIX spot closed at approximately 23.4 on Friday, having surged beyond 26 earlier in the week, marking the highest levels observed since spring. The VIX futures curve has shifted to a flat or mildly backwardated structure, with near-term contracts hovering around 22.9 for late November and extending into subsequent months. Meanwhile, rates volatility (MOVE) is situated near 78–79, close to its historical average, indicating it is not in crisis territory.

The volatility complex is signaling a notable expectation of an equity shock, although it does not reflect panic in the funding or rates sectors. The flat to slightly backwardated volatility curve suggests potential for larger intraday swings and gap risks, while also presenting significant reward opportunities when market entries align with critical price levels.

Options and Positioning

The total put/call ratio currently stands at approximately 0.87, with the index put/call ratio around 1.03, and exchange-traded products (ETP) at about 1.28. In contrast, the equity-only put/call ratio is at a lower 0.56. The 10-day moving average of the total put/call ratio is approximately 0.90, which is not indicative of panic extremes. The SKEW index is around 148—elevated, yet falling short of the extreme levels (150–160+) that typically signal substantial tail-risk hedging.

Institutional hedging remains present but lacks urgency; there is a distinct preference for put options in indices and ETFs, while single-stock options continue to skew toward calls. Coupled with a VIX in the low-20s and a near-flat curve, this indicates that dealers are likely moderately short gamma at current strike prices. Consequently, price movements beyond key levels may extend further than usual before reversion occurs. This inference, drawn from the volatility and put/call configurations, does not represent a direct measurement.

Market Breadth and Internals

Earlier in the week, the NYSE experienced a significant imbalance, with decliners outnumbering advancers by more than 3:1, alongside a higher count of new lows than new highs, a classic indicator of distribution. However, by Friday, the breadth reversed sharply, with approximately 2,237 advancers against 548 decliners on the NYSE. Nevertheless, the McClellan Oscillator remains negative (~-72), and the Summation Index is in a downward trajectory, suggesting ongoing repair rather than the emergence of a new bull trend. Defensive sectors, including health care and consumer staples, have outperformed, while tech and speculative AI stocks led the recent selloff.

The market has transitioned from a clear uptrend to a choppy corrective phase characterized by distribution. The activity on Friday, while indicative of an oversold breadth thrust, has not confirmed a market bottom.

Credit and Funding

The high-yield ETF (HYG) is trading around 80.3, only slightly below recent highs, indicating no signs of disorderly selling. The US high-yield option-adjusted spread (OAS) is near 3.17%, and B-rated high-yield OAS is about 3.3%, both well below long-term averages (>5%) and only marginally above recent tight levels.

Conclusion:

Credit markets display relative calm, reinforcing the notion that the recent weakness in equities is driven by valuation and sentiment rather than a funding crunch.

Sentiment and Crowd Positioning

Recent AAII survey results indicate roughly 32.6% of respondents identify as bulls, while 23.9% classify as bears. This results in a negative bull-bear spread of about -11%, contrasted with a long-run average of +6%. The combination of an elevated VIX, a negative bull-bear spread, and moderate put/call ratios reflects a climate of pessimism without full-fledged capitulation.

Practical Takeaway:

There exists potential for an upward squeeze if macroeconomic headlines shift towards dovish sentiment. However, a prolonged risk-off environment remains possible if critical support levels like S1 and S2 break.

Cross-Asset and Global Risk Tone

Global equities experienced their most significant weekly pullback since early this year, with the MSCI World Index declining by roughly 3%. Europe’s Stoxx 600 recorded its largest weekly drop since summer, primarily driven by weakness in the tech sector and increased volatility. The cryptocurrency market is in a full risk-off stance, with Bitcoin dipping to a seven-month low before rebounding around $84k, accompanied by sentiment indicators reflecting extreme pessimism and heavy liquidations, now followed by a weekend bounce from oversold RSI levels.

Relative Risk Tone:

The Nasdaq-100 (NQ) remains weaker compared to the S&P 500 (ES), aligning with the decline in tech and AI sectors, while defensive and value-oriented sectors maintain resilience. Overall, the cross-asset narrative suggests a risk-off tone, yet not systemic in nature—exactly the backdrop where well-defined level trading is most effective.

Macro and Data Calendar

The upcoming holiday-shortened week is set to unveil a series of delayed U.S. economic data, including September retail sales, PPI, Core PPI, home prices, pending home sales, inventories, and consumer confidence on Tuesday, followed by jobless claims, durable goods, Chicago PMI, and the Beige Book on Wednesday. The prior government shutdown has postponed key GDP and inflation reports, heightening uncertainty around the Fed's December decisions. Federal Reserve officials exhibit divided opinions about another rate cut in December; some advocate for a pause with inflation near 3%, while others, including at least one governor and the NY Fed president, lean toward support for an additional 25 basis point reduction. Market odds for a December cut have shifted within a ~50–70% range, depending on daily fluctuations.

Classification of the Recent Move:

This market dynamic appears primarily as a reset in valuations and positioning following the exuberance surrounding AI and tech, exacerbated by data-related uncertainty rather than stemming from a definitive “data shock” event.

13. Two A++ setups (for the coming sessions)

These are plan-level plays, to be executed only if price action and vol conditions line up as described.



A++ Setup 1: R1 Rejection Short

Trigger
Inside NY AM or the first hour of NY PM:
1. 15m candle wicks above 6,670–6,675 and closes back under 6,665.
2. 5m prints a lower high beneath that wick, closing back below ~6,660.
3. 1m breaks down through the intraday shelf near 6,655 with increased selling volume / negative delta.

Execution
• Entry: around 6,660–6,665 on the first 1m pullback that fails under the broken shelf.
• Initial stop: above the wick high, e.g. 6,690 (adjust to the actual 15m high but keep risk in the 20–25 point range).
• Risk (example): entry 6,665, stop 6,690 → 25 pts.

Targets
• TP1: 6,615–6,620 (VWAP / prior intraday shelf) → about 2R (50 pts) from a 25-pt stop.
• TP2: 6,540–6,550 (upper edge of S1 / prior congestion) – roughly 4R.
• TP3 (runner): 6,520–6,530 (core of S1 cluster) – 5R+ if reached.


A++ Setup 2: S1 Flush-and-Reclaim Long

Trigger
15m candle flushes below 6,530, ideally tagging 6,520–6,525, with a long tail and closes back above ~6,535–6,540.
5m shows a higher low above the 15m wick low, with real bids stepping in and volume picking up.
1m pushes back through 6,545–6,550 and holds, turning that band into a floor.

Execution
• Entry: 6,545–6,550 on the first 1m pullback that holds above 6,540 after the reclaim.
• Initial stop: below the 15m flush low, e.g. 6,515–6,520.
• Example parameters: entry 6,550, stop 6,520 → 30-pt risk.

Targets
• TP1: 6,595–6,600 (local shelf / prior L at 6,594 and ONH/VWAP neighborhood) → about 2R (60 pts) from a 30-pt stop.
• TP2: 6,662–6,678 (R1 band) – the same ceiling from Setup 1; that’s roughly 4R+ from the entry.
• TP3 (runner): 6,760–6,780 (R2) if data and vol cooperate, giving 7R+ potential.


If that microstructure doesn’t show up, downgrade each play from A++ to stand-aside – let someone else fight in the middle of the range and keep your capital for when the levels truly light up.

Good Luck !!!