ES Daily Plan | July 23, 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
Today, sellers aimed to defend the 5575/5585 area to maintain downside pressure. They were active during the Asian session, approaching 5575, but buyers eventually regained control of this level and 5585 during the European session. The RTH session opened within Thursday’s range, above Friday’s value area, putting Friday’s sellers below today’s Smashlevel at 5575 in a tricky situation. The A-period immediately tagged the final upside target at 5603, making it a suboptimal location to start chasing further upside for traders who missed the overnight bounce.
During the initial periods, notable swings broke both sides of the initial balance. If you didn't go long at 5603 or short at 5575, you likely had a more favorable session compared to most traders. Sellers had their chance in the E-period, making a lower low and testing 5575. However, buyers effectively defended this level, triggering another round of short covering that eventually led to tagging the next level of interest at 5615. The VIX crush definitely helped.
The daily has returned to balance following the break of Friday’s high. Buyers, having regained control of 5575 (LOD: 5572.75), managed to fully traverse Thursday’s lower distribution and reached a notable low volume node (LVN), where passive sellers were reloading today.
In terms of levels, the Smashlevel is at 5615, marking a notable LVN on the composite profile, aligning with the upper end of Thursday’s lower distribution and a prior weekly low. Holding below this level, would target the support area from 5585 to 5575. Acceptance below 5575, signaling weakness, would target Friday’s close at 5554. Failure to hold below 5615 would target a cleanup of Thursday’s poor structure toward the resistance area from 5638 to 5648.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5615.
Break and hold above 5615 would target 5638 / 5648
Holding below 5615 would target 5585 / 5575 / 5554
Additionally, pay attention to the following VIX levels: 15.72 and 14.10. These levels can provide confirmation of strength or weakness.
Break and hold above 5648 with VIX below 14.10 would confirm strength.
Break and hold below 5554 with VIX above 15.72 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.
VIX levels have been corrected—thanks Jeremy!
Thanks! 5575 was a banger!