ES Daily Plan | August 22, 2023

The daily has returned to a 3-day balance after breaching Friday's high, indicating that the market is taking a breather after last week's downside pressure.

Thursday's poor structure cleaned up in the process.

ES Daily Plan | August 22, 2023

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Contextual Analysis

Important notice: I will be away from my desk for the next few days. As a result, the daily plans will be given in a concise format without commentary. Regular, detailed plans will resume on Wednesday, or at the latest, on Thursday, August 24th. Stay nimble.

The daily has returned to a 3-day balance after taking out Friday’s high of 4396, effectively cleaning up the poor structure from Thursday in the process. As long as the market stays within this balance range, we can anticipate two-sided activity, emphasizing the need to remain adaptable and responsive. The short-term value (5D VPOC) has shifted from 4425 to 4385.

For tomorrow, the Smashlevel (Pivot) is 4417, representing today’s spike base within the highlighted resistance area. Break and hold above 4417 would target the previous week’s VPOC at 4425. Break and hold above 4425 would target 4443, as well as the final upside target of 4455. Holding below 4417, would target the 5% correction level at 4402, as well as the support area from 4385 to the final downside target of 4375. This support area is crucial for buyers to hold.

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Going into tomorrow's session, I will observe 4417.

• Break and hold above 4417 would target 4425 / 4443 / 4455

• Holding below 4417 would target 4402 / 4385 / 4375

Additionally, pay attention to the following VIX levels: 18.08 and 16.20. These levels can provide confirmation of strength or weakness.

• Break and hold above 4455 with VIX below 16.20 would confirm strength.

• Break and hold below 4375 with VIX above 18.08 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.

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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.

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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.