ES Daily Plan | February 24, 2023

Erratic session. Buyers were able to end the daily one time framing down to bring the daily back to a 3 day balance.

Was today's rally off 3970 driven solely by short-covering, or did stronger buyers enter the market?

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Contextual Analysis

The regular, detailed plans were supposed to resume today, but unfortunately, I'm still away from my desk. I expect to return within the next few days.

Erratic session. Buyers were able to end the daily one time framing down to bring the daily back to a 3 day balance. Today’s low was 4 handles shy off the Weekly Extreme Low 3970, which was highlighted in the Weekly Plan published last Saturday. However, I did not expect a 50 handle rally off that level without any pullbacks. Emotional. Note how Tuesday’s unfinished profile got resolved in the process. J-period left behind very poor structure due to the short-covering, check the footprint to the right. Buyers do not want to see established acceptance below that area of poor structure, while sellers aim to negate today's PM-session rally to confirm that the move was solely driven by short-covering, and not by stronger buyers entering the market.

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Going into tomorrow's session, I will observe 4005.

• Holding above 4005 would target 4030 / 4050 / 4067

• Break and hold below 4005 would target 3995 / 3970

Additionally, pay attention to the following VIX levels: 22.30 and 19.98. These levels can provide confirmation of strength or weakness.

• Break and hold above 4067 with VIX below 19.98 would confirm strength.

• Break and hold below 3970 with VIX above 22.30 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.

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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.

ES Weekly Plan | February 20-24, 2023

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