ES Daily Plan | January 16, 2024
I will use Friday’s afternoon rally high at 4824 as a reference point to assess the market's strength or weakness.
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
On Friday, much like Thursday, the market continued to encounter responsive sellers at the upper end of the weekly balance area. In other words, the unfinished business linked to the all-time high remains unresolved.
As mentioned in the weekly plan, our main attention will be on this 4-week balance area, specifically its upper end in the short-term. I will use Friday’s afternoon rally high at 4824 as a reference point to assess the market's strength or weakness.
Buyers aim to reclaim 4824, targeting the current all-time highs at 4839/4841 (ES) and the SPX ATH at 4818.62, roughly corresponding to 4850 for ES. On the flip side, the failure to reclaim 4824 would target a rotation towards the 4793/4783 support area—a crucial area for buyers to hold.
For tomorrow, the Smashlevel (Pivot) is 4824, representing Friday’s afternoon rally high. Break and hold above 4824 would target the current all-time high (ATH) from the regular trading hours and overnight session at 4839.75 and 4841.50, respectively. Break and hold above 4841, indicating a weekly balance breakout, would target 4850. It's worth noting that the SPX has not yet reached its ATH, situated at 4818.62, which roughly corresponds to 4850 for ES. Holding below 4824 would target the prior ATH at 4808, where Friday’s sellers are trapped, as well as the support area from 4793 to final downside target of 4783 in the event of sustained weakness.
Levels of Interest
Going into tomorrow's session, I will observe 4824.
Break and hold above 4824 would target 4841 / 4850
Holding below 4824 would target 4808 / 4793 / 4783
Additionally, pay attention to the following VIX levels: 13.26 and 12.12. These levels can provide confirmation of strength or weakness.
Break and hold above 4850 with VIX below 12.12 would confirm strength.
Break and hold below 4783 with VIX above 13.26 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! Although it is a shorter day tomorrow, let's try to make some green.
love your analysis broski thankyou from all the beginner noobs!