ES Daily Plan | August 12, 2024
My preparations and expectations for the upcoming session.
For new followers: The yellow levels highlighted at the bottom left of the chart 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
Friday’s session continued the pattern of higher lows on the daily chart, breaking out of Thursday’s inside day and completing a full traverse of the lower distribution from August 2nd. Friday’s range is important for two reasons: the high marks last week’s high, which buyers need to break to end the weekly one-time framing down, while the low is of interest for sellers to break in order to end the pattern of higher lows.
In terms of levels, the Smashlevel is at 5356. Holding above this level would maintain Friday’s inside day breakout, targeting 5385, with a final target at 5415 under sustained buying pressure, completing a full traverse of the upper distribution from August 2nd. Failure to hold above 5356 would target 5331, with a final target at 5308 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5356.
Holding above 5356 would target 5385 / 5415
Break and hold below 5356 would target 5331 / 5308
Additionally, pay attention to the following VIX levels: 21.86 and 18.88. These levels can provide confirmation of strength or weakness.
Break and hold above 5415 with VIX below 18.88 would confirm strength.
Break and hold below 5308 with VIX above 21.86 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
Make sure to review the Weekly Plan, which provides a broader perspective and highlights key levels of interest to observe in the upcoming 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 as always!