ES Daily Plan | December 18, 2023
Friday’s session resulted in an inside day, marked by its price range remaining confined within the previous day’s range.
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
Friday’s session resulted in an inside day, marked by its price range remaining confined within the previous day’s range. While an inside day doesn't technically end the daily one-time framing up, it implies a certain balance in the very short term, a factor we will be closely monitoring.
The general guideline suggests going with the break of the inside day and observing for continuation (Acceptance) or lack thereof (Rejection). If there's a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction. Remaining within the short-term balance increases the odds of sustained responsive activity.
Buyers aim to break and hold above the main resistance ranging from 4778 to 4788, while sellers target a break and hold below the main support area ranging from 4760 to 4750.
For tomorrow, the Smashlevel (Pivot) is 4760, representing the upper end of the support area. Holding above 4760 would target the resistance area from 4778 to 4788. Break and hold above 4788 would target the non back-adjusted all time high at 4808.25. Break and hold below 4760 would target fills of Thursday’s excess low towards 4750. Break and hold below 4750 would target the final downside target of 4735.
Levels of Interest
Going into tomorrow's session, I will observe 4760.
Holding above 4760 would target 4778 / 4788 / 4808
Break and hold below 4760 would target 4750 / 4735
Additionally, pay attention to the following VIX levels: 12.86 and 11.70. These levels can provide confirmation of strength or weakness.
Break and hold above 4808 with VIX below 11.70 would confirm strength.
Break and hold below 4735 with VIX above 12.86 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.
Thanks, my friend! I had a fantastic week; let's strive for success this week.