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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 conditions were straightforward heading into today’s session. Buyers needed to reclaim 7746 to demonstrate strength, while failure to do so, coupled with acceptance back into Tuesday’s value area, would favor continued downside pressure. Sellers stepped in at 7746 overnight (ON high: 7746.50), and the level ultimately capped the entire session. Acceptance back into Tuesday’s range, combined with the failure to reclaim 7726 (Smashlevel) during the European session, resulted in notable downside continuation, clearing all intraday targets down to 7681 (FDT). A solid bounce from 7681 unfolded ahead of the RTH session.
As highlighted in the pre-market update, the key for buyers heading into the RTH session was to reclaim 7706 (DT1), with the market opening with another true gap down. The morning session was largely about buyers attempting to reclaim the level, but the C-period was the only 30-minute close above it, highlighting the persistent presence of sellers. Notable absorption was observed around 7706 (see Figure 1). The failed Initial Balance extension in the D-period, during which the gap at 7720.75 remained unfilled (HOD: 7720), marked the starting point for another downside leg. The poor structure from August 4 was fully cleaned up in the process, with the market now approaching the bull gap at 7637.75.
Session Recap
Failure to reclaim 7746 and acceptance back into Tuesday’s value were the conditions for continued downside pressure, which ultimately unfolded today. A double distribution profile was established in the process, with three sets of single prints and a closing M-period spike.
The market is now approaching a significant HTF area: the breakout point of the prior multi-week balance. How the auction behaves around this area, which also contains the unfilled gap at 7637.75, will be crucial to monitor in the upcoming sessions. While sellers maintain short-term control of the auction, buyers remain in control from a broader-picture perspective—something that could change if the multi-week balance breakout is not defended.
In terms of levels, the Smashlevel is at 7669, the M-period spike base. Holding below 7669 keeps the downside pressure intact and targets the unfilled gap at 7637 (DT1). Acceptance below 7637 would signal intraday weakness, targeting the Weekly Extreme Low at 7620 (DT2), with 7589 (FDT) serving as the final downside target under sustained selling pressure.
On the flip side, reclaiming and holding above 7669 shifts focus to 7690 (UT1). Acceptance above 7690 would signal intraday strength, targeting 7705 (UT2), with 7720 (FUT), the unfilled gap, serving as the final upside target under sustained buying pressure.
Visual Representation
Levels of Interest
Going into tomorrow’s session, I’ll closely observe the behavior around 7669.
Break and hold above 7669 would target 7690 / 7705 / 7720
Holding below 7669 would target 7637 / 7620 / 7589
Additionally, pay attention to the following VIX levels: 16.74 and 15.26. These levels can provide confirmation of strength or weakness.
Break and hold above 7720 with VIX below 15.26 would confirm strength.
Break and hold below 7589 with VIX above 16.74 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.
Thanks Smash! Interesting spot for ES right now going forward.
Great stuff! Thanks!