ES Daily Plan | February 29, 2024
The market is currently coiling for a directional move, as it awaits additional market-generated information. The PCE data is scheduled for release tomorrow, serving as a potential catalyst.
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
The 5093 level has been our pivot since the beginning of this week, and it was tagged to the tick yesterday after-hours, finding selling activity. The selling pressure continued in the overnight session, resulting in another test of Thursday’s breakout point and a brief dip below 5067. However, this price exploration below 5067 ultimately proved short-lived as passive buyers successfully absorbed the aggressive sellers.
While the overnight session provided good moves, the RTH session, in contrast, remained notably muted. Trading activity occurred within both the overnight range and the previous day’s range, limiting opportunities. Low volatility typically translates to fewer trading opportunities, emphasizing the importance of exercising patience and discipline. It's crucial to refrain from throwing away your money out of boredom. Today’s session resulted in the short-term value (5D VPOC) shifting lower from 5102 to 5078.
After Monday’s session, the daily returned to balance, and today’s inside day serves as confirmation of the ongoing responsive two-sided activity. The market is currently coiling for a directional move, as it awaits additional market-generated information. The PCE data is scheduled for release tomorrow, serving as a potential catalyst.
The short-term playground remains between 5093, marked by a low volume node, and 5067, which was rejected after-hours. The targets remain unchanged, with buyers aiming to negate Friday’s excess high, while sellers aim to negate the Thursday’s breakout by establishing acceptance below the prior ATH at 5067.
For tomorrow, the Smashlevel (Pivot) is 5093, representing Friday’s low, and aligning with the lower end of the two highlighted distributions. Break and hold above 5093 would target the resistance area from 5111 to 5121, marking the upper end of the current 5-day balance area. Holding below 5093, signaling continued weakness, would 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 is a full traverse of Thursday’s lower distribution toward the support area from 5055 to 5045.
Levels of Interest
Going into tomorrow's session, I will observe 5093.
Break and hold above 5093 would target 5111 / 5121
Holding below 5093 would target 5071 / 5067 / 5055 / 5045
Additionally, pay attention to the following VIX levels: 14.38 and 13.30. These levels can provide confirmation of strength or weakness.
Break and hold above 5121 with VIX below 13.30 would confirm strength.
Break and hold below 5045 with VIX above 14.38 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. Great day for scalping exactly what I did.
That 67-71 range has been gold all week. S.o the 🐐