ES Daily Plan | January 31, 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
Quick update today, as the market remains largely unchanged in terms of context. The overnight session was fairly uneventful, with sellers emerging around the 6102 level after an attempt by buyers to gain traction above Wednesday’s range.
As discussed, the market remains in a tricky position, with Monday’s gap still unfilled, yet value being established above Monday’s range. Today’s session continued along this uncertain path, with large swings in both directions. The VIX was particularly noteworthy, with its 15.58 support level tested multiple times. While initial breaks in the A and E periods quickly recovered, the third break during the H period held, providing an early clue that the market might attempt to tag its final upside target at 6122, marking the unfilled gap. At the very least, it signaled caution for shorts. Unfortunately, the market fell just a few handles short of filling the gap before a liquidation break unfolded in the M-period, highlighting the tricky conditions traders are facing in navigating the current market environment. The short-term value (5D VPOC) has shifted lower from 6128 to 6081.
The market continues to establish value within Tuesday’s value area, leaving Monday’s gap unfilled and keeping the overall context unchanged after today’s session. Establishing value above 6093 is bullish, while building value below 6065 is bearish within the context of the last three sessions. The primary objective for buyers remains to return within the 3-day range, while sellers aim to reject the last three sessions by returning to Monday’s value, maintaining downside pressure. PCE on deck tomorrow.
In terms of levels, the Smashlevel is at 6093, which marks both a lower volume node and the 3-day composite value resistance. Holding above this level would target the unfilled gap at 6122, with a final target at 6145 under sustained buying pressure. Conversely, failure to hold above 6093 would target 6065, with a final target at 6043 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 6093.
Holding above 6093 would target 6122 / 6145
Break and hold below 6093 would target 6065 / 6043
Additionally, pay attention to the following VIX levels: 16.72 and 14.98. These levels can provide confirmation of strength or weakness.
Break and hold above 6145 with VIX below 14.98 would confirm strength.
Break and hold below 6043 with VIX above 16.72 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 sir!
Thank you very much!