ES Daily Plan | July 11, 2023
ES Daily Plan | July 11, 2023
Given the uneventful nature of today's session, I will maintain my observation on 4451, and all levels remain unchanged.
The market is currently in a state of balance, awaiting further market-generated information.
Contextual Analysis
Friday's closing weakness carried over into today’s overnight (ON) session, as prices were explored below the lows of both Friday and Thursday's sessions. After breaking below Friday's low, the market stalled at 4425 for several periods before the next drop occurred, breaking Thursday's low. Reminder, Thursday’s low of 4419.50 is the low of the inside week. The break of 4425 led to a test of the next level of interest at 4410, where the sellers got too short, resulting in the formation of a poor low. At the opening of the European session, the sellers initially defended the backtest of Thursday’s low; however, the buyers managed to return within last week's range.
The RTH session was predominantly uneventful, with trading confined within Thursday's range. The buyers failed to challenge the Smashlevel of 4451, while the sellers were unsuccessful in replicating the initial weakness observed during the overnight session. The B-period provided a decent opportunity from an orderflow perspective. Passive sellers were actively reloading and absorbing the aggressive buying effort slightly below the level of 4451, specifically within the range of 4447-4443. This dynamic ultimately resulted in a reversal, leading to another test of 4425, which held and marked the low of the day (4424). I will provide a visual of this sequence on Substack. The rest of the session was basically contained within the initial balance range (first hour of RTH).
The current state of the market on both the daily and weekly is characterized by balance, highlighting the importance of staying nimble and adaptable. The 3-day balance high is poor, while the low is weak against the medium-term value of 4419. The short-term value (5-day VPOC) shifted from 4485 to 4438. Given the uneventful nature of today's session, I will maintain my observation on 4451, and all levels remain unchanged. Don't forget to check out the Weekly Plan that was published Saturday, as it offers a view of the bigger picture. The previous week failed to breakout from the weekly balance area, and if sellers are able to breach the HVN at 4419, it could potentially lead to a test of the opposite side of the range. The buyers aim to establish acceptance back within the 3-day composite, for an attempt to clean up the unfinished business at the highs.
For tomorrow, the Smashlevel (Pivot) is 4451, representing Friday’s noteworthy level. Break and hold above 4451 would target the resistance area from 4465 to 4475, essentially the 3-day balance high. In the event of further strength, the last upside target is located at 4485, the HVN from the 3-day composite. Holding below 4451 would target today’s Thursday’s HVN at 4425, essentially the 3-day balance low, as well as the last downside target of 4410, where sellers got too short during today’s ON session.
Going into tomorrow's session, I will observe 4451.
Break and hold above 4451 would target 4465 / 4475 / 4485
Holding below 4451 would target 4425 / 4410
Additionally, pay attention to the following VIX levels: 15.88 and 14.26. These levels can provide confirmation of strength or weakness.
Break and hold above 4485 with VIX below 14.26 would confirm strength.
Break and hold below 4410 with VIX above 15.88 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.
Thank you smash!
Thanks Smash, appreciated as always. A bit off-topic maybe: but how do you manage these write-ups if I may ask? I get the charting and all, but the left side containing the notes, updating the key metrics and then merging it into one image, do you use a specific tool for it? I find it very organised and actually prefer it above my own plain text writeups, as they tend to get cluttered after a while.