ES Daily Plan | April 29, 2024
The upside momentum from Thursday’s session carried over into Friday, as the market broke out of the 8-day balance area. Monitor for continuation (Acceptance) or lack thereof (Rejection).
For new followers, the yellow levels highlighted at the bottom are the primary levels that I focus on intraday. My strategy for preventing impulsive decisions at unfavorable locations involves following a simple yet effective rule of exercising caution when initiating trades outside of the yellow levels. This implies that I am cautious chasing longs above the final yellow upside target and shorts below the final yellow downside target. It is crucial to understand that refraining from chasing a trade is not an automatic invitation to initiate a trade in the opposite direction.
Visual Representation
Contextual Analysis
The upside momentum from Thursday’s session carried over into Friday, as the market opened with a true gap up and subsequently broke out of the 8-day balance area, partially filling the poor structure from April 15th. As is typical in breakout scenarios, the primary focus is to closely monitor for continuation (Acceptance) or lack thereof (Rejection).
The strongest response would involve maintaining above 5125, favoring an upside continuation with targets at 5154 and 5174. Failure to do so would open the door for fills of Friday’s A-period excess toward the opening level of 5011, and the unfilled gap at 5090.75 in the case of continued weakness.
For tomorrow, the Smashlevel (Pivot) is 5125, representing the prior 8-day balance high, and Friday’s halfback. Holding above 5125, favoring further upside, targeting the breakdown single prints at 5154. Acceptance above would then target the final upside target of 5174. Take note of the Monthly VWAP, MA20 and MA50 in between. Break and hold below 5125, trapping Friday’s breakout traders, would target the opening level at 5111. In the case of continues weakness, the final downside target is the unfilled gap at 5090.75.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5125.
Holding above 5125 would target 5154 / 5174
Break and hold below 5125 would target 5111 / 5090
Additionally, pay attention to the following VIX levels: 15.68 and 14.42. These levels can provide confirmation of strength or weakness.
Break and hold above 5174 with VIX below 14.42 would confirm strength.
Break and hold below 5090 with VIX above 15.68 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.
Weekly Plan
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.
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.
Thank you Smash!