ES Daily Plan | January 6, 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
A brief recap of Friday’s session was published on Substack (Link), emphasizing how the correlation between ES and VIX levels, as outlined in the daily plans, can provide clues about potential market direction. Holding the selling attempts below 5946 (intraday bullish above), with the VIX losing its support level of 16.95, was a sign of strength, suggesting that the resistance area between 5965-5975 was unlikely to hold, particularly after already being tested multiple times.
The market is currently in short-term balance, forming a 4-day balance area, with Friday’s session closing near its upper extreme. As outlined in the Weekly Plan, the key early in the week will be to monitor whether Friday’s double distribution trend day will be accepted or rejected, providing clues about the market's next move.
The strongest response would see an immediate continuation higher, ending the weekly one-time framing down. A less bullish response would involve accepting this trend day by building value within the upper distribution, while a weak market would reject it by falling back to the lower distribution.
In terms of levels, the Smashlevel is at 5993. Holding below this level would target 5965, where change took place on Friday, with a final target at 5946 under sustained selling pressure. This aligns with both the monthly VWAP and last week’s VWAP. Conversely, failure to hold below 5993 would target the daily NVPOC at 6014, with a final target at 6034 under sustained buying pressure, effectively traversing the lower distribution from 12/27.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5993.
Break and hold above 5993 would target 6014 / 6034
Holding below 5993 would target 5965 / 5946
Additionally, pay attention to the following VIX levels: 17.04 and 15.22. These levels can provide confirmation of strength or weakness.
Break and hold above 6034 with VIX below 15.22 would confirm strength.
Break and hold below 5946 with VIX above 17.04 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 buddy! Let’s have a tremendous week.
Thanks, already a fight at 5993!