ES Daily Plan | July 8, 2024
As outlined in the weekly plan, the primary focus is to monitor for continuation (acceptance) or lack thereof (rejection), following last week's breakout.
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
The market remained balanced for 11 consecutive sessions, during which participants consistently agreed on value, leading to opposing responses to any deviations. Since markets are constantly shifting between balance and imbalance, we expected this balance phase to eventually transition into a directional move. A breakout was initiated during Wednesday’s shortened session, followed by a continuation higher on Friday. Note how Tuesday’s session closed with a spike above the multi-day value area, and how Wednesday’s session showed limited trading interest within the spike area.
As outlined in the weekly plan, the primary focus is to monitor for continuation (acceptance) or lack thereof (rejection). In the short-term, I will observe Friday’s spike base at 5621. Upon acceptance above, signaling strength, buyers are targeting 5640 and 5660. Failure to do so would potentially open the door for fills of Friday’s structure toward its halfback at 5605, and the breakout point at 5585—both levels where I'll be monitoring for buying activity.
For tomorrow, the Smashlevel (Pivot) is 5621, which represents Friday’s M-period spike base. Break and hold above 5621, signaling strength, would target an upside continuation toward 5640, with a final target at 5660 in case of continued strength. Holding below 5621 would target technical fills of Friday’s structure toward its halfback at 5605. Acceptance below 5605 would then target the final downside level of 5585, marking the breakout point—a crucial area for buyers to defend.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5621.
Break and hold above 5621 would target 5640 / 5660
Holding below 5621 would target 5605 / 5585
Additionally, pay attention to the following VIX levels: 13.02 and 11.94. These levels can provide confirmation of strength or weakness.
Break and hold above 5660 with VIX below 11.94 would confirm strength.
Break and hold below 5585 with VIX above 13.02 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.
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