ES Daily Plan | June 13, 2023
Double distribution trend day to the upside with two sets of single prints.. The CPI data is scheduled for release tomorrow, which should be fun.
Contextual Analysis
Just a reminder that I have transitioned to the ESU23 (September) contract. Please note that I do not back-adjust my charts. I suggest marking 4304.75 (Friday’s ESM23 settlement) on your chart, as roll gaps often tend to get filled.
The overnight (ON) was a non-event, as trading was confined within Friday’s range (ESU23). Sellers successfully defended the Smashlevel of 4358 during the Asia session, but buyers were able to regain control of it during the European session, leading to a push towards Friday's poor high. Close to the poor high, selling activity emerged, and as the market subsequently dropped, the VIX breached its resistance level of 14.52.
The RTH session opened precisely at 4358, and the market experienced a narrow trading range during the initial periods. Interestingly, despite the subsequent developments in the session, the most traded price by volume (VPOC) remained at 4355. As the VIX remained above 14.52, the buyers faced difficulties in gaining upside traction. However, the sellers didn't accomplish much either. Did you notice how buyers started having more success as the VIX slowly returned back below 14.52? Change took place in K-period, when the market decisively breached Friday’s high (ESU23). As a result, the last intraday upside target of 4380 was met and exceeded. It’s worth noting that the VIX was also up today (hedging activity), which made it tricky to chase.
Today’s session formed a double distribution with two sets of single prints. As mentioned, the VPOC remains in the lower distribution. The market is one-time framing up across all time frames. The primary objective for sellers is to put an end to the daily one-time framing up, and until that occurs, maintaining a bearish stance becomes quite challenging. My short-term level of interest is the lower end of the upper distribution, with the intention of targeting fills of the poor structure if it is broken. Sellers want acceptance back within the lower distribution below 4369, to negate today’s breakout in K-period. As the market approaches the weekly resistance area, it is noteworthy that the Monthly Extreme High is located at 4410. This creates an interesting area to observe for potential signs of selling activity. Just keep in mind that buyers are in full control of the auction. The CPI data is scheduled for release tomorrow, and as usual, it is expected to bring volatility in the market. Stay nimble.
Going into tomorrow's session, I will observe 4380.
Holding above 4380 would target 4395 / 4405 / 4418
Break and hold below 4380 would target 4369 / 4355
Additionally, pay attention to the following VIX levels: 15.74 and 14.28. These levels can provide confirmation of strength or weakness.
Break and hold above 4418 with VIX below 14.28 would confirm strength.
Break and hold below 4355 with VIX above 15.74 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.
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.
Your levels are the best
Thanks for your killer reports Smashelito! Amazing again!!!