ES Daily Plan | February 5, 2025
My preparations and expectations for the upcoming session.
For new followers: The yellow levels highlighted at the bottom left of the chart 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.
Visual Representation
Contextual Analysis
The overnight session saw an immediate test of the resistance area between 6058 and 6068 following yesterday’s after-hours bounce, where selling activity emerged. A break and hold above 6068 would have signaled an intraday bullish state; however, buyers struggled to gain traction above this level throughout the full session. The rejection from resistance led to a test of Monday’s afternoon pullback low at 6004, but sellers were also unable to gain traction below, resulting in a bounce. The overnight session cleaned up Monday’s poor structure; however, it remains unresolved during the RTH session—carry forward.
The RTH session opened in the middle of Monday’s upper distribution and value, making it a poor location to engage in trades, as price action can be choppy. The struggle for sellers continued in the A-period, as their aggression on the tape had zero traction. When the B-period opened, the Smashlevel at 6037 was reclaimed, with aggressive buyers stepping in. Unlike the sellers, these buyers managed to get paid for their efforts. The VIX had already breached its support level during the B-period, a positive development for dip buyers; however, the resistance area between 6058 and 6068 capped today’s upside.
The market managed to fill Monday’s true gap, but the traction within Friday’s range was limited, with the 6068 level capping the upside. A double distribution formed after a small set of single prints in the B-period, but we saw some after-hours weakness, which we need to monitor for continuation. The door for weakness opens below 6038, while 6068 remains a key level for buyers to reclaim.
In terms of levels, the Smashlevel is at 6068. Holding below this level would target the breakout single prints at 6038, aligning closely with the afternoon pullback low. Acceptance below 6038 signals weakness, targeting the a traverse of Monday’s upper distribution toward 6004. Conversely, failure to hold below 6068 would target 6093, with a final target at 6115 under sustained buying pressure, effectively cleaning up Friday’s poor structure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 6068.
Break and hold above 6068 would target 6093 / 6115
Holding below 6068 would target 6038 / 6004
Additionally, pay attention to the following VIX levels: 18.24 and 16.16. These levels can provide confirmation of strength or weakness.
Break and hold above 6115 with VIX below 16.16 would confirm strength.
Break and hold below 6004 with VIX above 18.24 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
Make sure to review the Weekly Plan, which provides a broader perspective and highlights key levels of interest to observe in the upcoming week.
Can't thank you enough. Learn so much from you. Short and to the point. Actionable. Really great stuff.
Very nicely written. Thank you