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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
Sellers stepped in at 7703.25 overnight, a couple of ticks shy of 7705 (Smashlevel), which was our main pivot for the today. This ultimately marked the high of the full session. The remainder of the overnight session consolidated around 7676 (DT1), Friday’s inside-day low, with the ON VPOC at 7677 further highlighting the concentration of trading around this level.
An inside-day breakdown was initiated immediately in the RTH session, resulting in a traverse of Thursday’s lower distribution and testing 7659 (DT2) in the process. Sellers were unable to sustain the continuation below last week’s low, leading to a couple of solid reversals. From an order flow perspective, I particularly liked the D-period reversal after aggressive sellers attempted to establish a new intraday low but were instead absorbed (see Figure 1). Buyers were ultimately unable to regain acceptance back within Friday’s range, and the auction instead build value within Thursday’s lower distribution.
The short-term value (5D VPOC) has shifted lower from 7726 to 7671. Value continues to follow price, suggesting no meaningful shift in the short-term tone. However, I want to point out once again that while short-term control remains with sellers, trade location for initiating new shorts is rather unfavorable from an HTF perspective, as the auction approaches the multi-week balance breakout point. This may be one reason why the market is lacking meaningful conviction (short-term structure bearish, long-term bullish).
Session Recap
The market continues to develop value lower, consistent with sellers maintaining short-term control, but the pace of the downside move remains relatively measured. Notable absorption was observed around last week’s low at 7659 today, a key level sellers need to gain acceptance below. Acceptance above 7683, last week’s VAL, would be short-term bullish.
In terms of levels, the Smashlevel is at 7683, last week’s VAL. Holding below 7683 keeps downside pressure intact and targets last week’s low at 7659 (DT1). Acceptance below 7659 would signal intraday weakness, targeting the unfilled bull gap at 7637 (DT2), with 7618 (FDT) serving as the final downside target under sustained selling pressure.
On the flip side, reclaiming and holding above 7683 shifts focus to 7705 (UT1), with 7720 (FUT), the unfilled bear 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 7683.
Break and hold above 7683 would target 7705 / 7720
Holding below 7683 would target 7659 / 7637 / 7618
Additionally, pay attention to the following VIX levels: 16.62 and 15.08. These levels can provide confirmation of strength or weakness.
Break and hold above 7720 with VIX below 15.08 would confirm strength.
Break and hold below 7618 with VIX above 16.62 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.
Thank you
Loving the footprint / OF illustrations within the broader context of the days analysis. Helpful for me to follow and file these patterns of passive/aggressive participants.