ES Daily Plan | February 26, 2024
In the short term, I'll be closely monitoring whether buyers can reject Friday’s trend day, aiming to negate the excess high, or if sellers can break Friday’s low to end the daily one-time framing up.
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
In Friday’s plan, I highlighted my intention to play defense. This decision was prompted by Thursday's session, which came within 7 handles of the Weekly Extreme High of 5115, marking our final weekly upside target. Additionally, the short-term value (5D VPOC) at 4977, significantly 120 handles below Thursday's settlement, made me reluctant to get caught chasing at a potentially poor location. It’s worth noting that the 5D VPOC remains at 4977, but it will most likely shift to 5102 if buyers can continue to maintain these higher prices following the breakout.
Friday’s session unfolded into a double distribution trend day to the downside, following an upside gap that lacked sustained follow-through. The upper distribution formed an excess high, while the highlighted lower distribution essentially traded within Thursday’s upper distribution—our immediate focus.
In the short term, as outlined in the Weekly Plan, I'll be closely monitoring whether buyers can reject Friday’s trend day, aiming to negate the excess high, or if sellers can break Friday’s low to end the daily one-time framing up, targeting a retest of Thursday’s breakout point.
For tomorrow, the Smashlevel (Pivot) is 5093, representing Friday’s low, and aligning with the lower end of Thursday’s upper distribution. Holding above 5093, signaling strength, would target the upper end of Friday’s lower distribution at 5111. Acceptance above 5111 would target an upside continuation toward the final upside target of 5135, effectively negating Friday’s excess high. Break and hold below 5093 would end the daily one-time framing up, and target the Quarterly and Monthly Extreme Highs at 5071 and 5067, which also represent the breakout point. In the case of continued weakness, the target will be fills of Thursday’s A-period excess.
Levels of Interest
Going into tomorrow's session, I will observe 5093.
Holding above 5093 would target 5114 / 5135
Break and hold below 5093 would target 5071 / 5067
Additionally, pay attention to the following VIX levels: 14.32 and 13.18. These levels can provide confirmation of strength or weakness.
Break and hold above 5135 with VIX below 13.18 would confirm strength.
Break and hold below 5067 with VIX above 14.32 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.
Thank you, buddy! Another great week coming up, I can't wait!
Thank you!