ES Daily Plan | August 13, 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
The overnight session kicked off with a quick look below the Smashlevel of 5356 and fail, eventually leading to a move towards the initial upside target of 5385. As noted, the 5385 level is significant because it marks both last week’s high and, more importantly, the upper end of the large distribution on the composite profile. Note the low volume area (LVA) above 5385.
The RTH session was relatively uneventful, characterized by two-sided activity. Buyers failed to gain traction above 5385, and sellers struggled to generate meaningful downside momentum below 5356, which held firm despite multiple tests. An interesting sequence unfolded today as buyers attempted a range extension above the initial balance in the C and D-periods. The excess high formed in the D-period coincided with the VIX testing its support level at 18.88 (LOD: 18.89). If one was long off the 5356 level, this confluence could have served as a signal to exit or book profits. The break of 5385 ended the weekly one-time framing down, marking an important achievement for buyers.
Today’s session was characterized by a two-sided tape, with buyers failing to gain traction above last week’s high of 5385, while the pivot at 5356 effectively capped the downside despite multiple tests. This price action was not surprising given the upcoming economic data releases, starting with PPI tomorrow pre-open.
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 / (5435-5445)
Break and hold below 5356 would target 5331 / 5308 / (5285-5275)
Additionally, pay attention to the following VIX levels: 22.18 and 19.14. These levels can provide confirmation of strength or weakness.
Break and hold above 5415 with VIX below 19.14 would confirm strength.
Break and hold below 5308 with VIX above 22.18 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.
Thanks! Let the volatility begin!
Thank you, buddy!