ES Daily Plan | January 2, 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
On Monday, the market saw an inside week breakdown following an opening with a true gap down. Although the gap was later filled, buyers failed to make significant progress within Friday's range, resulting in weakness into the close. Heading into Tuesday's session, the focus was on whether buyers could return within previous week's range, and indeed, the RTH session opened above the 5965 level. The initial upside target of Tuesday’s session was the 5980 level, marking a high volume node (HVN). A break and hold above 5980 would signal an intraday bullish state, but buyers failed to achieve this, instead forming a poor high.
Sellers extended the initial balance to the downside during the D-period, forming single prints that remained unfilled. Just like Monday’s session, buyers were active within the weekly support area between 5930 and 5900. As outlined in the Weekly Plan, defending this support is crucial for buyers; failing here could open the door for a drop to the long-term value (90D VPOC) at 5785, effectively filling the election gap at 5813.50 in the process. It's worth noting that a break below 5898.25 would not only shift the weekly to one-time framing down but it would also end the monthly one-time framing up, highlighting the importance of this inflection point.
Sellers have maintained short-term control since Friday's gap lower, a trend that continues after Tuesday's double distribution profile, which features a set of single prints in the D-period separating the two distributions. A weak market will remain within the lower distribution, favoring a downside continuation, while buyers aim to find acceptance within the upper distribution, with their primary objective being to end the daily one-time framing down.
In terms of levels, the Smashlevel is at 5950, representing Tuesday’s afternoon rally high. Holding below this level would target Tuesday’s lows at 5919, which is weak against Monday’s low. Acceptance below 5919 signals weakness, targeting 5900, with a final target at 5880 under sustained selling pressure. Failure to hold below 5950 would target a traverse of Tuesday’s upper distribution toward 5980, with a final target at 6005 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5950.
Break and hold above 5950 would target 5980 / 6005
Holding below 5950 would target 5919 / 5900 / 5880
Additionally, pay attention to the following VIX levels: 18.30 and 16.40. These levels can provide confirmation of strength or weakness.
Break and hold above 6005 with VIX below 16.40 would confirm strength.
Break and hold below 5880 with VIX above 18.30 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.
Thank you! December low will indeed be crucial!
Happy new year!!!