ES Daily Plan | June 11, 2024
Today’s session formed an inside day, confirming the ongoing responsive two-sided activity in the market as it awaits further market-generated information.
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 overnight session struggled to gain traction above the Smashlevel of 5358, resulting in a move toward the initial downside target of 5337 and an attempt at a 2-day balance breakdown (ONL: 5338.25). This breakdown ended up failing, triggering a move in the opposite direction.
The RTH session came down and tested the 2-day balance to the tick in the A-period, and reversed, suggesting that the market simply lacked initiative sellers. This was weak from sellers, especially with an elevated VIX holding above its resistance level of 12.78. In an overall upward trend, marked by both weekly and monthly one-time framing up, simply that lack of initiative sellers is enough to attract responsive buyers, as highlighted by today’s session. The morning session was one-time framing up intraday, forming four sets of single prints at one point. One set of single prints was filled during the afternoon pullback, when the market retested the regained 5358 level, where buyers stepped in for an upside continuation.
Today’s session formed an inside day, confirming the ongoing responsive two-sided activity in the market as it awaits further market-generated information. The question is whether we will see a directional move before Wednesday’s CPI and FOMC. An inside day breakout would target Friday’s excess high and new ATHs, while a lack of breakout, or a failed attempt, would target fills of today’s poor structure, including three sets of single prints. As I've mentioned before, poor structure within a balanced market and poor structure during breakout scenarios are two different situations. The former is more likely to result in fills compared to the latter, making it important to monitor the 5374 level in the short-term.
For tomorrow, the Smashlevel (Pivot) is 5374, representing the upper end of today’s inside day. Break and hold above 5374, indicating an inside day breakout, would target the prior Weekly Extreme High of 5390, effectively negating Friday’s excess high in the process. Acceptance above 5390 signals intraday bullish momentum, targeting the final upside target of 5405. Holding below 5374 would target the afternoon pullback at 5358. Acceptance below 5358 signals intraday bearish momentum, targeting fills of today’s single prints toward the final downside target of 5337.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5374.
Break and hold above 5374 would target 5390 / 5405
Holding below 5374 would target 5358 / 5337
Additionally, pay attention to the following VIX levels: 13.30 and 12.18. These levels can provide confirmation of strength or weakness.
Break and hold above 5405 with VIX below 12.18 would confirm strength.
Break and hold below 5337 with VIX above 13.30 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.
5374 works to the tick
Hi Smashelito,
First of all, I'd like to thank you for your tremendous contribution to the community and at the same time ask why today your smashlevel is 5374 and not 5358, which has a marked LVN.
I would like to understand why you consider 5374 to be a more significant level than 5358.
Thank you very much for your brilliant and clear reports.