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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?
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.
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.
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. Twitter: @smashelito | FAQ: smashelito.com