ES Daily Plan | January 24, 2024
There has been a lot of order flow activity at 4895 this week, making it our level of interest for tomorrow.
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.
Today was generally quiet, as both the overnight and RTH sessions traded within the previous day's range, ultimately establishing an inside day. There's no need for extensive analysis given the unchanged context. Buyers continued to struggle with the task of reclaiming our Smashlevel of 4886 for the most part of the session. However, sellers' inability to achieve their primary objective—to end the daily one-time framing up—triggered a squeeze during the PM session after the formation of another poor low.
On Friday, we observed a breakout from the 4-week balance area, and our primary objective was to monitor for continuation (Acceptance) or lack thereof (Rejection). Currently, the market has demonstrated acceptance of the directional move by spending time and volume at these higher prices—establishing value. The short-term value (5D VPOC) has successfully shifted higher from 4792 to 4883, further validating this acceptance.
Today’s session resulted in an inside day, characterized by its price range being contained within the previous day’s range. While the daily technically maintains its one-time framing up, the value of the last two sessions is unchanged, suggesting short-term balance—our immediate focus. There has been a lot of order flow activity at 4895 this week, making it our level of interest for tomorrow. Upon acceptance above, the primary targets are 4913 and 4930. The downside targets I’m observing in the lack of initiative buyers are 4881 and 4860.
For tomorrow, the Smashlevel (Pivot) is 4895, representing a high volume node (HVN) from the past two sessions. Break and hold above 4895 would target an upside continuation towards 4913, as well as the final upside target of 4930, in the case of continued strength. Holding below 4895 would target today’s afternoon pullback low of 4881. Acceptance below 4881 would target the lower end of Friday’s upper distribution at 4860.
Levels of Interest
Going into tomorrow's session, I will observe 4895.
Break and hold above 4895 would target 4913 / 4930
Holding below 4895 would target 4881 / 4860
Additionally, pay attention to the following VIX levels: 13.08 and 12.02. These levels can provide confirmation of strength or weakness.
Break and hold above 4930 with VIX below 12.02 would confirm strength.
Break and hold below 4860 with VIX above 13.08 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.
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.