ES Daily Plan | July 16, 2024
My preparations and expectations for the upcoming session.
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.
Visual Representation
Contextual Analysis
I'm a bit under the weather, so I'll keep this very brief. Today, sellers were unable to capitalize on Friday's sharp downward reversal into the close, resulting in an early tag of the final upside target at 5698. Despite initial struggles, buyers managed to break 5698, triggering a squeeze towards the Monthly Extreme High of 5715, the next level of interest. However, the VIX diverged by not confirming the strength, making it tricky to chase the move. As mentioned in the pre-open post on X (Link), a strong market would hold above 5698, but it ultimately failed to do so, resulting in a move back to today’s pivot at 5674. Notably, when the market returned to 5698 in the F-period and failed to hold it, the VIX breached its resistance level of 12.98.
Buyers continue to maintain control by forming higher highs and higher lows, establishing value within Friday’s range. However, price exploration above the previous week’s high was quickly rejected, forming an excess high. The closing session saw a downward spike, which was quickly picked up at a visual reference, making it weak. Buyers aim to negate the excess, while sellers aim to break the pattern of higher lows.
In terms of levels, the Smashlevel (Pivot) is at 5676, marking the spike base. Holding above this level targets a retest of 5700. Acceptance above 5700, signaling strength, would then target 5715, with a final target at 5730 in case of sustained buying pressure. Failure to hold above the highlighted spike area from 5676 and 5666 would open the door for a return to the high volume node (HVN) at ~5643.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5676.
Holding above 5676 would target 5700 / 5715 / 5730
Break and hold below 5676 would target 5666 / 5643
Additionally, pay attention to the following VIX levels: 13.66 and 12.56. These levels can provide confirmation of strength or weakness.
Break and hold above 5730 with VIX below 12.56 would confirm strength.
Break and hold below 5643 with VIX above 13.66 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
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 for your analysis. Feel better soon!
Thanks! Get well soon!