ES Daily Plan | December 5, 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 overnight session immediately tested the Smashlevel at 6064, printing a low of 6063, which remained the low for the full session. The market's acceptance of higher prices following Friday’s directional move set the stage for cleaning up the poor high and resolving the highlighted imbalance to the upside. This process began during the overnight session as the market continued to grind higher, eventually tagging the initial upside target at 6080, where a distribution was established pre-open.
The RTH session opened with a true gap to the upside, and the initial balance (the first hour of RTH) was characterized by two-sided activity, as participants tried to gain control of the opening level. The B-period corrected inventory, filling a set of single prints from the overnight session, after which significant buying activity entered the market at 6075. Much of today’s session involved buyers struggling to gain traction above the overnight high. This resulted in the formation of a notable intraday poor high, ultimately leading to a liquidation break in the afternoon session. As mentioned in the previous plan, any failed attempt by sellers to shift momentum signals that the upward trend is likely to continue. The look below the full session VWAP and fail during the I-period provided an opportunity for patient buyers to enter, using late sellers (those attempting to predict a trend reversal) as fuel to drive a continuation higher and clean up the poor high. The clear target was the final upside level at 6095, which was tagged in the last hour of trading.
The market's establishment of value at higher prices following Friday’s move from balance was a bullish indication, as previously discussed. Today’s session saw an upside continuation, forming a double distribution profile and clearing all intraday targets. Change took place in the J-period, making it the immediate level of interest.
In terms of levels, the Smashlevel is at 6089, where change took place today. Holding above this level would target today’s high of 6102. Acceptance above 6102 would then target 6117, with a final target at 6135 under sustained buying pressure. Failure to hold above 6089 would target 6078, with a final target at the unfilled gap at 6066 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 6089.
Holding above 6089 would target 6102 / 6117 / 6135
Break and hold below 6089 would target 6078 / 6066
Additionally, pay attention to the following VIX levels: 14.22 and 12.68. These levels can provide confirmation of strength or weakness.
Break and hold above 6135 with VIX below 12.68 would confirm strength.
Break and hold below 6066 with VIX above 14.22 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 green day!
Thank you as always!