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The yellow levels highlighted at the bottom left of the chart are the primary intraday levels I focus on. To avoid impulsive decisions at poor trade locations, I follow a simple but effective rule: exercise caution when initiating trades outside of these yellow levels.
This means I’m cautious about chasing longs above the Final Upside Target (FUT) and shorts below the Final Downside Target (FDT). It’s important to understand that not chasing does not imply initiating a trade in the opposite direction. Discipline over impulse.
Be sure to review the Weekly Plan for a broader perspective, key levels, and market expectations for the week ahead.
Contextual Analysis & Plan
The overnight session saw a slow upward grind toward the key 7784 level, which has attracted responsive sellers throughout the week. Another pop above 7784 was sold ahead of the PPI release (see Figure 1). Much like the CPI, the reaction to PPI was muted, but 7784 was reclaimed heading into RTH. The most traded price by volume (VPOC) overnight was 7783.50.
The market opened above 7784 on both Tuesday and Wednesday, with both attempts met by immediate selling activity. If we look at the composite profile from the recent multi-day balance area, where I’ve merged the profiles, we can see that 7784 marks the upper end of the high volume area, suggesting that acceptance above this area was needed to meaningfully shift the tone. Unlike Tuesday and Wednesday, buyers were able to defend 7784 early in the session (LOD: 7785.50), which essentially triggered a directional move.
7810 (UT2) was tagged almost immediately, leading to a small pullback that provided a great opportunity to join the move if not already in, targeting 7836 (FUT). I’ll provide a visual of this sequence on Substack, given how interesting it was from an order flow perspective (see Figure 2). The final upside target at 7836 was tagged in the B-period, which ended up capping today’s upside. Even though the auction was bullish from the open, trade location remains key. If you were not part of the move early, chasing new longs at 7836 (FUT) was not ideal.
Session Recap
The auction is once again attempting to transition from balance to imbalance in the direction of the prevailing trend after today’s breakout to new ATHs. Now we monitor for continuation (acceptance) or a failure to do so (rejection).
Today’s halfback at 7813, aligning with last week’s VAH, is the immediate level of interest, along with aggressive support at 7820, the prior ATH.
Intraday strength would be indicated by a break and hold above 7837 (UT1), while weakness would be signaled by a break and hold below 7793 (DT1).
In terms of levels, the Smashlevel is at 7813, last week’s VAH, which aligns with today’s halfback. Holding above 7813 targets 7837 (UT1). Acceptance above 7837 would signal intraday strength, targeting 7855 (UT2), with 7888 (FUT) serving as the final upside target under sustained buying pressure.
On the flip side, failure to hold 7813 shifts focus to 7793 (DT1), with 7759 (FDT) serving as the final downside target under sustained selling pressure.
Visual Representation
Levels of Interest
Going into tomorrow’s session, I’ll closely observe the behavior around 7813.
Holding above 7813 would target 7837 / 7855 / 7888
Break and hold below 7813 would target 7793 / 7759
Additionally, pay attention to the following VIX levels: 15.42 and 13.86. These levels can provide confirmation of strength or weakness.
Break and hold above 7888 with VIX below 13.86 would confirm strength.
Break and hold below 7759 with VIX above 15.42 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.
Just an fyi, NQ rocketed from Bullish Lean Above (Weekly Newsletter) 30,030.25!! Truly appreciate your occasional NQ ideas while secretly hoping it will be regular some day :)
Great stuff Smash! Thanks!!