ES Daily Plan | December 12, 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
The immediate attention, as outlined in the previous plan, was on 6045, representing the prior all-time high (ATH) and aligning with Tuesday's spike base. Sellers failed to achieve immediate downside continuation during the overnight session, as the market held above 6045 (ONL: 6045.50) while awaiting the CPI data release. Following the release, an impulsive move higher unfolded, with buyers reclaiming the resistance area between 6062 and 6069—an important level to regain short-term control, as previously discussed.
There was no corrective activity during the RTH session, making it challenging for traders without existing positions. The very shallow pullbacks offered little opportunity, and the final upside target was already tagged in the B-period (6090.25). The VIX held above its support level at 13.32, making it challenging to chase further upside around the 6090 level, which provided an 8-handle pullback. The market began consolidating during the C and D periods; however, buyers managed to extend the initial balance for a continuation higher. Personally, this upside continuation was not appealing to chase, given the proximity of the high volume node at 6098 as the upside magnet. Recall how we discussed that the 6098 HVN would act as a magnet once 6062 was reclaimed. One important purpose of the marked levels on the chart is to serve as crucial reference points for assessing market strength and weakness. Once the 6062-69 level was reclaimed, the downside bias from Tuesday’s session was invalidated, emphasizing the need for traders to adapt and not be stuck in the prior day’s session. The market almost fully returned to 6090 by the closing session, highlighting the importance of adjusting target expectations if you chase upside at a poor location.
The market retraced two days of weakness today following the CPI data release. A strong market will find acceptance above today’s high, opening the door for a cleanup of the unfinished business at the ATH. Conversely, a weak market will return within Tuesday’s range, raising questions about today’s price action. PPI tomorrow pre-open.
In terms of levels, the Smashlevel is at 6090. Holding above this level would target the poor high at 6103. Acceptance above 6103 signals strength, targeting 6117, with a final target at 6135 under sustained buying pressure. Failure to hold above 6090 would target 6076, with a final target at 6062 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 6090.
Holding above 6090 would target 6103 / 6117 / 6135
Break and hold below 6090 would target 6078 / 6062
Additionally, pay attention to the following VIX levels: 14.28 and 12.88. These levels can provide confirmation of strength or weakness.
Break and hold above 6135 with VIX below 12.88 would confirm strength.
Break and hold below 6062 with VIX above 14.28 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.
Thank you buddy! Another outstanding day!
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