ES Daily Plan | December 1, 2023
Today's session concluded with a closing rally, resulting in an upward spike as the M-period set a new daily high.
Visual Representation
For new followers, the yellow levels highlighted at the bottom 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.
Contextual Analysis
Throughout the greater part of the overnight session, trading unfolded in between yesterday’s middle and lower distribution, with participants struggling to gain traction in either direction. Buyers found greater success during the European session, picking up the initial liquidation break. This led to an upward push, testing the initial upside target at 4578, where sellers were active (ONH: 4578.25.)
The RTH session opened within yesterday’s middle distribution, but buyers quickly lost control of the intraday pivot at 4563, leading to some weakness. The market was forming lower highs and lower lows intraday (30-minute bars); however, sellers encountered difficulty in establishing a significant downside momentum, showing a lack of pace. The first downside target in the case of a break and hold below 4563 was 4544, which was essentially reached in the I-period (LOD: 4544.75). There was a significant amount of resting liquidity positioned near the 4544 level, as evidenced in the attached video capturing today’s closing session. The J-period ended the pattern of intraday lower highs by taking out the I-period high. This triggered short-covering and a return to the intraday pivot at 4563. Initially, it was rejected perfectly, but aggressive sellers were absorbed in the subsequent pullback, and the closing M-period ramped higher to make new highs. As mentioned, I've attached a brief replay of today's closing sequence for your reference. Take note of the iceberg at 4550 during the pullback in the L-period.
Quick replay of today's closing session, featuring a perfect rejection from the intraday pivot, an iceberg at 4550, and an EOM ramp into the next level of interest:
The market continues its ongoing consolidation phase, currently within a 6-day balance, with responsive activity remaining the prevailing theme. Today's session concluded with a closing rally, resulting in an upward spike as the M-period set a new daily high. The general guideline is as follows: trading within and above the spike base of 4569 (Acceptance) presents a more favorable outcome for buyers, targeting the upper end of the multi-day balance area. Conversely, trading below the spike base (Rejection) is a more favorable outcome for sellers aiming to reestablish acceptance within today’s main distribution, with a target set on the multi-day balance low.
For tomorrow, the Smashlevel (Pivot) is 4569, which represents the M-period spike base. Holding above 4569, indicating acceptance, would target today’s high, also previous week’s high at 4580. Break and hold above 4580 would target 4591, as well as the final upside target of 4604. Break and hold below 4569, indicating rejection, would target the support area from 4555 to final downside target of 4545.
Levels of Interest
Going into tomorrow's session, I will observe 4569.
Holding above 4569 would target 4580 / 4591 / 4604
Break and hold below 4569 would target 4555 / 4545
Additionally, pay attention to the following VIX levels: 13.54 and 12.42. These levels can provide confirmation of strength or weakness.
Break and hold above 4604 with VIX below 12.32 would confirm strength.
Break and hold below 4544 with VIX above 13.52 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
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.
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.
Appreciate the video!
Another great day. Thank you, buddy, for using your previous levels to guide me. Longs and shorts.