ES Daily Plan | January 8, 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
The overnight session quickly tested the initial upside target at 6029, a critical level for buyers to reclaim to negate Monday’s closing weakness. Sellers successfully defended 6029 on the initial test, driving a move lower to test the Smashlevel at 6009, the base of Monday’s spike. Buyers were active within Monday’s excess low, triggering a 30-handle rally before the RTH session opened and breaking through the 6029 level in the process.
The RTH session opened well above 6029, within Monday’s upper distribution, and an early look above the overnight high and fail triggered a reversal. The main thing to observe during this pullback was whether the market could hold above the 6029 level, which would leave sellers within Monday’s lower distribution in a tricky position. Holding above 6029 was considered intraday bullish, while failing to do so would open the door for another test of the spike area. The first test of 6029 provided a bounce, aligning with the FS VWAP; however, the bounce ultimately failed when the B-period triggered a data-related liquidation break, effectively filling Monday’s gap at 5996.75 in the process.
During the C-period, it was all about whether buyers were able to reclaim the 5996 level, as failure to do so would be intraday bearish. Notably, the VIX had already breached its resistance level of 16.94 during the B-period, a pivotal level throughout the session. For new followers, all these levels were outlined in the previous plan. Ultimately, buyers failed to reclaim 5996 after multiple attempts during the C, D, and E-periods, which eventually led to the final downside target at 5965—a level discussed in the Weekly Plan. The first test of 5965 provided a solid 25-handle bounce before sellers smashed it lower, coinciding with the VIX retesting its resistance. When 5965 was breached in the L-period, I wasn't looking to be a hero (buying the dip), given the confirmation of weakness from the VIX. The market dropped another 30 handles, testing the 5D VPOC at 5936—a level highlighted in the previous plan as a potential downside magnet upon weakness.
Monday’s true gap higher was ultimately rejected today after sellers not only filled the gap but also gained traction within last week's range, a scenario where trouble would kick in for buyers. Friday’s session was fully traversed in the process, and the session closed within its lower distribution after another downward spike—which is of interest in the short term.
In terms of levels, the Smashlevel is at 5944. Holding above this level would target 5965, a level discussed in the Weekly Plan. Acceptance above 5965 would target the afternoon rally high at 5990, with a final target at 6009 under sustained buying pressure. Conversely, failure to hold above 5944 signals weakness, targeting 5920, with a final target at 5900 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5944.
Break and hold above 5944 would target 5965 / 5990 / 6009
Holding below 5944 would target 5920 / 5900
Additionally, pay attention to the following VIX levels: 18.78 and 16.84. These levels can provide confirmation of strength or weakness.
Break and hold above 6009 with VIX below 16.84 would confirm strength.
Break and hold below 5900 with VIX above 18.78 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.
While others continue to raise prices for their newsletters, Smash is here providing the best one completely free. Forever grateful. I nailed a great short from the 96 area!
Second to none work, brother. When price is traded through Smashlevel, plays/setups most likely run smoothly. The greatest highlight of the session today was the “Downside Magnet 🧲” at 5936 👀