ES Daily Plan | July 30, 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
Overnight, buyers managed to regain 5511, leading to a test of the crucial high volume node at 5530 during both the Asian and European sessions. Both attempts encountered selling activity. The RTH session was relatively uneventful, marked by morning weakness that found support at Friday’s value area low (TPO), and an afternoon session that failed above the initial balance high, forming a poor high. The morning weakness coincided with a test of the VIX resistance level at 17.24 (HOD: 17.21) before reversing, creating an interesting confluence.
Needless to say, trading within the highlighted 4-day composite value area demands a high level of discipline and flexibility. When the market lacks clear directional conviction, it’s crucial not to overstay your welcome in any trade. The short-term value (5D VPOC) has shifted lower from 5611 to 5505, which is bearish in the context of recent weakness and suggests that sellers remain in short-term control until proven otherwise. Buyers, who have the overall trend in their favor with the monthly one-time framing up, must start establishing value at higher prices, preferably above the key 5530 level. Failure to do so would favor continued downside pressure.
Friday’s inside day was followed by another inside day today, confirming the market's state of balance. Responsive two-sided activity is expected within highlighted composite value area, while a decisive directional move would require acceptance beyond this range.
In terms of levels, the Smashlevel is at 5496. Holding above this level would target the resistance area from 5520 to 5530, with a final target at 5549 under sustained buying pressure. Failure to hold above 5496 would open the door for a test of 5474, with 5455 being the next target under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5496.
Holding above 5496 would target 5520 / 5530 / 5549
Break and hold below 5496 would target 5474 / 5455
Additionally, pay attention to the following VIX levels: 17.44 and 15.74. These levels can provide confirmation of strength or weakness.
Break and hold above 5549 with VIX below 15.74 would confirm strength.
Break and hold below 5455 with VIX above 17.44 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.
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.
Imagine the horror of markets regaining 5530 before all them events !
Thanks!