ES Daily Plan | August 26, 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
On Thursday, the market gapped higher but failed to sustain its momentum, triggering a long liquidation that effectively ended the daily one-time framing up and brought the daily back to balance. Friday’s session cleaned up Thursday’s poor structure and formed an inside day. The balance guidelines apply, as the market is awaiting additional market-generated information to guide its next move.
Responsive activity is expected within this 5-day balance, while a more decisive directional move would require acceptance outside its extremes. The general guideline suggests going with the break of the multi-day balance area and monitoring for continuation (acceptance) or lack thereof (rejection). If there is a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction.
In terms of levels, the Smashlevel is at 5654, marking the previous week’s VAH (Value Area High). Holding below this level signals a lack of initiating activity, targeting Friday’s halfback at 5633, with a final target at 5610 under sustained selling pressure. Failure to hold below 5654 would open the door for a balance breakout, targeting 5676, with a final target at the resistance area from 5690 to 5700 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5654.
Break and hold above 5654 would target 5676 / 5690 / 5700
Holding below 5654 would target 5633 / 5610
Additionally, pay attention to the following VIX levels: 16.74 and 14.98. These levels can provide confirmation of strength or weakness.
Break and hold above 5700 with VIX below 14.98 would confirm strength.
Break and hold below 5610 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.
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.
Ah I see now. Thanks!
Thank you! What’s the difference between the left 5 day “composite” TPO versus the right 5 day balance TPO?