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The yellow levels highlighted at the bottom left of the chart are the primary intraday levels I focus on. To avoid impulsive decisions at poor trade locations, I follow a simple but effective rule: exercise caution when initiating trades outside of these yellow levels.
This means I’m cautious about chasing longs above the Final Upside Target (FUT) and shorts below the Final Downside Target (FDT). It’s important to understand that not chasing does not imply initiating a trade in the opposite direction. Discipline over impulse.
Be sure to review the Weekly Plan for a broader perspective, key levels, and market expectations for the week ahead.
Contextual Analysis & Plan
The immediate area of interest today was Wednesday’s spike area, highlighted on the chart. A weak market would accept the lower prices established by the spike by defending its base at 7371 (Smashlevel). The next level for sellers to defend was 7398 (UT1), as failure to do so would put Wednesday’s breakdown into question. Overnight, the main focus was on 7371, which buyers took control of during the Euro session, with VIX actually breaking below its support level at 19.56. The 7398 level initially slowed upside momentum, but buyers reclaimed it ahead of the RTH session, signaling weak sellers in the context of Wednesday’s breakdown.
During the RTH session, buyers defended the 7398 level twice: first immediately in the A-period, and then again during the D- and E-periods, where the auction formed a poor low. There was little reason to maintain a bearish intraday bias, as sellers’ failure to defend 7371 and 7398 opened the door for a rotation back toward value.
This is how the auction process works: when the market moves away from balance (value), the key question is whether those new prices are accepted or rejected. Acceptance indicates that the market is willing to do business at the new price levels, allowing the move to continue. Rejection signals a lack of participation and often results in a rotation back toward prior value.
Session Recap
Wednesday’s breakdown attempt from balance was rejected today, triggering a rotation back toward value. The key question now is whether sellers’ failure to sustain lower prices will increase confidence in a move in the opposite direction.
Last week’s gap remains unfilled at 7525.25, a key level for buyers to reclaim in order to shift the tone, as previously discussed.
Intraday strength would be indicated by a reclaim of 7485 (UT1), while weakness would be signaled by a break and hold below 7425 (DT1).
In terms of levels, the Smashlevel is at 7460, the composite LVN. Holding above 7460 signals stability and targets 7485 (UT1). Acceptance above 7485 would signal intraday strength, targeting 7525 (UT2), with 7548 (FUT) serving as the final upside target under sustained buying pressure.
On the flip side, failure to hold 7460 shifts focus to 7425 (DT1), with 7400 (FDT) serving as the final downside target under sustained selling pressure.
Visual Representation
Levels of Interest
Going into tomorrow’s session, I’ll closely observe the behavior around 7460.
Holding above 7460 would target 7485 / 7525 / 7548
Break and hold below 7460 would target 7425 / 7400
Additionally, pay attention to the following VIX levels: 18.12 and 16.06 These levels can provide confirmation of strength or weakness.
Break and hold above 7548 with VIX below 16.06 would confirm strength.
Break and hold below 7400 with VIX above 18.12 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.
Smash you are the foundation of professionalism
Glad to have found you
Thank you, Smash! I was discussing with others today that while the market did not take yesterday's high, the recent regime has demonstrated how useful breakouts from inside days have been. Hence why I am considering ES in a 2-day balance, the high being yesterday's high and the balance low, yesterday's low. The maintenance window printed a new high, but the Globex session is starting to see some rejection from the balance high, balance rules are always important.