How Monthly, Weekly, and Daily Levels Guide the Market
Educational Guide and Updated Levels for August and Next Week - Tech and Semiconductors still have work to do.
In the noise of daily market fluctuations, traders often chase price action blindly, reacting to headlines long after institutional algorithms have already made their moves. To navigate this complexity, structured quantitative analysis provides a distinct edge. By utilizing a multi-timeframe framework of monthly, weekly, and daily levels, you can map out the market’s roadmap well before the opening bell.
These levels are not arbitrary lines; they anticipate where institutional algorithms are likely to react. These levels are waypoints, to successfully trade them, you must assess real-time price action alongside overbought and oversold conditions.
Here is how to structure, sequence, and execute this multi-timeframe approach for maximum clarity.
Understanding the Hierarchy of Timeframes
When analyzing market structure, each timeframe serves a specific tactical purpose:
Monthly Levels (The Macro Momentum): Monthly levels provide the clearest, widest visibility of the broader market structure. Being above or below the central monthly level dictates the prevailing long-term momentum and defines whether the broader regime is bullish or bearish. These levels are key for (long term) investors who don’t move their money every week or day.
Weekly Levels (The Swing Blueprint): Weekly levels are ideal for managing multi-day swings and positioning through intermediate trends. They act as the primary battlegrounds where institutional participants defend or abandon significant positions.
Daily Levels (The Execution Grid): Daily levels work exceptionally well for short-term swings and scalps. More importantly, daily levels serve as early warning signals when an asset is attempting to reverse. Because the central daily level is typically recovered or lost before the weekly level, it acts as the vanguard of a shift in momentum.
For investors, weekly and daily levels dramatically improve entry precision. I remember when I posted on social channels on June 25th that Micron (MU) was poised to fill its gap following an after-hours rally and likely initiate a sharp reversal from extreme overbought conditions. Some comments brushed it off, arguing that a pullback was fine for long-term holders. That pullback ultimately plunged the stock from 1,254 down to 737 by July 29th, marking a staggering 41% drawdown. It makes you wonder how easy it is to stomach a capital loss of that magnitude while staying optimistic about clawing that money back, relying solely on hopes of further bullish continuation to make the original decision make sense.
Is There an Order of Considerations?
Yes. While monthly levels set the overarching momentum, the sequence of interaction across timeframes dictates how a reversal unfolds.
Consider a typical bottoming process during a sell-off. When an asset is deeply oversold, the recovery rarely happens all at once. First, the price must reclaim the central daily level, signaling early intraday exhaustion from sellers.
We saw that transparently on March 31st, I anticipated a bounce coming in the Weekly Compass posted on March 28, that week I began to post daily executive notes with daily levels for the SPX, when the central daily level (CDL) was recovered, a first bullish signal was printed, then the weekly was recovered, and we managed momentum updating levels to manage momentum and risk.
Next, if buying pressure persists, it pushes the price up to challenge the central weekly level. Only when institutional accumulation forces the price through the weekly threshold does the asset target the central monthly level.
As we saw recently during the market’s mid-week recovery, an asset can reclaim its daily level, push through the weekly level, and put a reversal into play before the monthly level is even reached (the current case for Semiconductors SMH and AMD). Conversely, if a rally stalls out right at a declining weekly level without ever threatening the monthly structure, it confirms that the broader macro trend remains dominant and the bounce is merely a corrective counter-trend move.
These levels are modeled every Friday for you, providing the information needed to assess risk and reward before the market opens on Monday. You don’t have to wait for the opening bell to decide your plan and which securities to trade; you have here the distances to essential levels and the setups suggesting whether they will act as support or resistance well in advance, so you make informed and serene decisions ahead of Monday morning.
Our Core Watchlist:
Indices & Futures: SPX, NDX, DJI, IWM, ES=F, NQ=F
ETFs: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, VXX
Major Stocks: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, BRK.B, LLY, WMT, AVGO, COST, JPM, XOM, PLTR, NFLX, V, AMD
Crypto & Related: Bitcoin, Ethereum, ETHA, IBIT
Leveraged ETFs: TQQQ, SQQQ, UDOW, SDOW, UPRO, SPXS, URTY, SRTY
Unlock the levels for next month and week, plus my daily updates for the SPX by subscribing to the paid plan. I post three core publications per week (this is one of them), and daily updates with levels for the SPX.
These levels work very well as targets, we saw this week the setups I posted last weekend reaching their targets: NFLX 🎯, AAPL 🎯, SMH 🎯 (bearish), AMD 🎯 (bearish) , WMT 🎯, COST 🎯, AMZN 🎯, JPM 🎯, and MSFT 🎯. Trading is about probabilities and risk management, 9 high probability setups reached their targets, the levels kept us away from META that was expected to bounce, and in the case of XOM the setup is still in play on its way to the target. Setting targets is key to secure profits by closing a trade or updating the referral levels to set stop losses while the price has directional conviction.
Let’s continue with this educational content and the updated levels for AUGUST and NEXT WEEK.
Reading the Price Action at the Level
A level is only as good as the price action delivering the asset to its doorstep. To determine whether a level will hold, flip, or break, we evaluate in this publication price action and momentum indicators: