ES Daily Plan | January 14, 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
As mentioned in the previous plan, directional moves from high volume nodes can be quite powerful. The overnight session saw an immediate downside continuation after failing to hold the 5856 level early on. The support area between 5823 and the unfilled election gap (non-back-adjusted) at 5813.50 served as the primary downside target—an area to monitor for buying activity in case of an immediate test, as noted in the prior plan. The support was already tested overnight, filling the gap; however, for it to be considered officially filled, this must occur during the RTH session. Buying were active after tagging 5813.50, resulting in a solid pre-open bounce.
The RTH session opened with a true gap down, within the support area. The 5813.50 gap was officially filled before a bounce unfolded, effectively closing today’s gap at 5845.25, marking Friday's low. The VIX initially held above its resistance level of 20.88 but dropped back below it during this bounce. Sellers were active after the 5845.25 gap fill and managed to retest the opening level. The opening level is an important reference point when the session opens with a true gap in either direction. In today’s case, sellers needed to break it to maintain downside pressure after defending Friday’s low, but they ultimately failed to break it after multiple attempts. Notably, VIX held below 20.88 during these attempts.
Change took place in the G-period, as buyers started to gain traction within last week’s range, effectively negating today’s true gap down. The market was grinding higher and ultimately tested the resistance area between 5875 and 5884 during the closing session, forming an M-period spike. The short-term value (5D VPOC) has shifted lower from 5950 to 5864, making it crucial to monitor who gains control of the last two days' closely aligned VPOCs in the short term.
Today’s session opened with a true gap down, filled the election gap at 5813.50 (LOD: 5813), before reversing from the support area, which was highlighted as an area for potential buying activity. Immediate resistance is at 5875-84, which buyers aim to regain to end the daily one-time framing down and target fills of Friday’s A-period excess. Immediate support is at 5856-47, which sellers aim to break for continued downside pressure. PPI is on deck tomorrow.
In terms of levels, the Smashlevel is at 5884. Holding below this level would target the support area between 5856 and 5847. Acceptance below 5847 signals weakness, targeting 5819. Conversely, failure to hold below 5884 would open the door for a test of 5902, with a final target at 5921 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5884.
Break and hold above 5884 would target 5902 / 5921
Holding below 5884 would target 5856 / 5847 / 5819
Additionally, pay attention to the following VIX levels: 20.50 and 17.88. These levels can provide confirmation of strength or weakness.
Break and hold above 5921 with VIX below 17.88 would confirm strength.
Break and hold below 5819 with VIX above 20.50 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.
VIX levels corrected!
You smashed that support! Thanks as always!