ES Daily Plan | February 5, 2024
Immediate resistance is at 4984, while the immediate support of interest is at 4960, marking both the breakout point and the afternoon pullback low—a crucial area for buyers to hold.
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
Friday witnessed a breakout from the multi-day balance area, marking a new all-time high and forming a double distribution profile. In Friday’s plan, I emphasized that ES above 4960 and NQ above 17600 were conditions I considered unwise to fade on a Friday. Traders who disregarded this advice likely encountered significant challenges throughout the session.
As outlined in the weekly plan, our primary focus is to monitor for continuation (Acceptance) or lack thereof (Rejection). The most bullish response involves establishing value above the prior multi-day balance area, thereby accepting Friday’s directional move. Conversely, the most bearish responsive would involve a return into the prior multi-day balance area. Immediate resistance is at 4984, while the immediate support of interest is at 4960, marking both the breakout point and the afternoon pullback low—a crucial area for buyers to hold.
For tomorrow, the Smashlevel (Pivot) is 4984, representing Friday’s G-period high. Break and hold above 4984 would target the current all-time high (ATH) at 4997.75. Acceptance above 4997.75 would shift the weekly to one-time framing up once again, targeting the final upside target of 5013. Holding below 4984 would target the breakout point and afternoon pullback low at 4960. Acceptance below 4960 would target the final downside target of 4945, where notable order flow activity was observed on Friday.
Levels of Interest
Going into tomorrow's session, I will observe 4984.
Break and hold above 4984 would target 4997 / 5013
Holding below 4984 would target 4960 / 4945
Additionally, pay attention to the following VIX levels: 14.48 and 13.22. These levels can provide confirmation of strength or weakness.
Break and hold above 5013 with VIX below 13.22 would confirm strength.
Break and hold below 4945 with VIX above 14.48 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.
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