ES Daily Plan | April 24, 2023

As outlined in my Weekly Plan that was published yesterday, my primary focus is on Friday's extremes in the short-term.

Breach of Friday's high ends the daily OTFD, while the breach of the low ends the Weekly OTFU.

---

Contextual Analysis

Friday’s overnight (ON) session was uneventful, as trading remained within Thursday’s range. However, during the European session, some significant rotations occurred, particularly in the form of upward reversals. To emphasize this further, I will share a visual of these sequences on Substack.

Reversals from Friday’s ON session.

Friday’s RTH session opened right in the middle of Thursday’s range, and the price action was quite similar to the overnight session. The session was rotational with failed range extension at both extremes. In Friday’s recap, I shared a visual of the sneaky liquidity grabs that were quickly followed up by rapid reversals. Breakout traders had a very tough session. During the C-period, the range extension towards the downside resolved the unfinished business from Thursday's low. Although the delta was negative by 10K in C-period, the sellers failed to gain traction towards the downside, following the clean up of the Thursday’s poor low. A noteworthy detail was the presence of a passive buyer at 4140, which was the same level that capped the downside during the overnight session.

As outlined in my Weekly Plan that was published yesterday, my primary focus is on Friday's extremes in the short-term. The rationale behind this is quite simple - if the market breaches Friday's high, it marks the end of the daily one-time framing down, which could potentially pave the way to challenge the two daily excess highs from last week. Conversely, if the market takes out Friday's low, it would signal the end of the Weekly one-time framing up. This would indicate a shift in the market's tone and could potentially result in downward pressure, given that the market has been forming higher lows on a weekly basis for a prolonged period. Observing a lack of continuation after breaching either of the extremes is also valuable market-generated information. If the sellers manage to sustain the pattern of lower highs, their primary objective is a traverse of the value area towards 4114/4098.

The 5-day and 20-day VPOC, representing the short and medium-term value, are both located at 4153, making it an area of interest as directional moves are often initiated from high volume nodes (HVN). While the market may be gearing up for a directional move, it is unwise to attempt to forecast it. It's best to take things day by day and remain flexible enough to adapt to any change in the market's dynamics.

---

Going into tomorrow's session, I will observe 4161.

• Break and hold above 4161 would target 4180 / 4194

• Holding below 4161 would target 4146 / 4130 / 4114

Additionally, pay attention to the following VIX levels: 17.72 and 15.82. These levels can provide confirmation of strength or weakness.

• Break and hold above 4194 with VIX below 15.82 would confirm strength.

• Break and hold below 4114 with VIX above 17.72 would confirm weakness.

Overall, it's important to exercise caution when trading outside of the highlighted yellow levels. A non-cooperative VIX may suggest possible reversals i.e trade setups.

---

Be sure to check out the Weekly Plan, which provides a broader perspective and highlights significant levels of interest to watch in the coming week.

ES Weekly Plan | April 24-28, 2023

---

Disclaimer: Futures and options trading involves a high level of risk, with the potential for substantial losses. The information provided in this newsletter is for informational purposes only and is not intended to be a trade recommendation. It is the responsibility of the reader to make their own investment decisions and they should seek the advice of a qualified securities professional before making any investments. The owners/authors of this newsletter are not certified as registered financial professionals or investment advisers.