ES Daily Plan | December 17, 2024

My preparations and expectations for the upcoming session.

Dec 16, 2024

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

Just a quick reminder that I have transitioned to the to the ESH25 contract. For reference, I do not back-adjust my charts. I recommend marking 6055.50 on your chart, as roll gaps often tend to get filled. While some traders choose to back-adjust their charts, I prefer to leave historical levels unchanged, resulting in a visible roll gap on the chart. Regardless of your approach, my daily levels of interest remain the same.

Sellers initially defended the Smashlevel at 6132 during the overnight session. However, buyers regained control during the European session, reclaiming this level and driving an upside continuation that eventually tagged the initial target at 6145. During the RTH session, the market saw rotational activity around 6145 in the A-period, while the B-period experienced increased volatility. A quick look above the A-period high and fail triggered a liquidation break that found buyers after briefly dipping below the full session VWAP. The C-period extended the initial balance range to the upside, followed by a couple of consolidating periods that formed a poor high. The G-period saw price exploration higher, cleaning up the poor high in the process. The primary upside target for the session was the resistance area between 6165 and 6175, but the market formed another poor high just below it at 6163.75 before a second liquidation break unfolded in the closing session.

Today's session looked like it was going to end as a double distribution profile. However, a poor high followed by the closing liquidation break during the M-period filled the single prints from the G-period that had initially separated the two distributions.

In terms of levels, the Smashlevel is at 6155. Holding below this level would target 6132, with a final target at 6111 under sustained selling pressure. Failure to hold below 6155 would target an upside continuation toward 6175, with a final target at 6200 under sustained buying pressure.

Levels of Interest

Going into tomorrow's session, I will closely observe the behavior around 6155.

Break and hold above 6155 would target 6175 / 6200
Holding below 6155 would target 6132 / 6111

Additionally, pay attention to the following VIX levels: 15.46 and 13.92. These levels can provide confirmation of strength or weakness.

Break and hold above 6200 with VIX below 13.92 would confirm strength.
Break and hold below 6111 with VIX above 15.46 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.