ES Daily Plan | July 22, 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
On Friday, the market continued its downward trajectory following Wednesday’s true gap lower and Thursday’s double distribution trend day, ending the week with an outside week down. As outlined in the weekly plan, having reached an area of prior balance, it’s expected that the downward auction will slow, making early-week conditions potentially tricky to navigate.
In terms of levels, the Smashlevel (Pivot) is at 5575, marking the lower end of the highlighted resistance area up to 5585. Holding below this area, signaling weakness, would target the high volume node (HVN) at 5530, with a final target at 5505 under sustained selling pressure. Failure to hold below 5575/5585 would open the door for a test of 5603, located within Friday’s excess high.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5575.
Break and hold above 5575 would target 5585 / 5603
Holding below 5575 would target 5530 / 5505
Additionally, pay attention to the following VIX levels: 17.42 and 15.62. These levels can provide confirmation of strength or weakness.
Break and hold above 5603 with VIX below 15.62 would confirm strength.
Break and hold below 5505 with VIX above 17.42 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.
Will be very interesting tomorrow! Thank you!
Thank you, buddy! Let's have a great trading week!