ES Daily Plan | June 14, 2024
The daily has formed a 2-day balance, which is now of short-term interest. Buyers maintain full control.
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
During the overnight session, trading activity remained within yesterday’s range, with a notable push higher following the release of the PPI data. This upward move came within 2 handles of the Weekly Extreme High of 5455, where passive sellers were waiting.
The RTH session was marked by morning weakness, followed by afternoon strength. The morning appeared promising for sellers for a couple of reasons: an immediate sell-off at the RTH open and a break below yesterday’s low, ending the daily one-time framing up. Value was overlapping lower, and the bounce in the E-period failed to fill the B-period single prints, giving sellers an opportunity for another leg to the downside, potentially forming a triple distribution profile. When the F-period made a new session low, several interesting developments occurred: VIX tested its resistance level of 12.56 (HOD: 12.68), NQ approached within 20 handles of its Weekly Extreme High of 19480, outlined in the previous plan (LOD: 19500), and ES formed a poor low after effectively absorbing aggressive sellers at 5410. Note the snapshot of the footprint on the chart for visual reference.
The key observation following this sequence was whether buyers could establish momentum within the prior day’s range and the critical 5421 level, potentially opening the door for a move toward the next level of interest at 5440, or if sellers were able to reload for another downside leg. The 5440 level was too strong of a magnet, and we can observe how the short-term value (5D VPOC) has now shifted higher after today’s session. This is bullish in the context of yesterday's breakout from balance.
Today’s session saw weakness with technical fills of structure in the morning, but sellers were unable to fully capitalize on it, only partially filling yesterday’s gap before a reversal unfolded. The daily has formed a 2-day balance, which is now of short-term interest. As always, the general guideline for balance suggests going with the break of the highlighted 2-day balance area and monitoring for continuation or lack thereof. A lack of continuation following a breakout attempt can trigger moves in the opposite direction. Buyers maintain full control, and trouble would only really kick in with acceptance back within the prior multi-day balance area formed before CPI.
For tomorrow, the Smashlevel (Pivot) is 5445, representing the lower end of the immediate resistance area. Break and hold above 5445 would target the Weekly Extreme High of 5455. Break and hold above 5455, indicating a breakout, would target 5465, as well as the final upside target of 5480, in the case of continued strength. Holding below 5445 would target 5421. Acceptance below 5421 would then target a balance breakdown toward the support area from 5395 to 5385.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5445.
Break and hold above 5445 would target 5455 / 5465 / 5480
Holding below 5445 would target 5421 / 5395 / 5385
Additionally, pay attention to the following VIX levels: 12.42 and 11.46. These levels can provide confirmation of strength or weakness.
Break and hold above 5480 with VIX below 11.46 would confirm strength.
Break and hold below 5385 with VIX above 12.42 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.
Thank you! Sellers got nothing!
Thanks for these posts, I learn a lot from them!
How are 5465/5680 significant levels, are they extensions of current balance range? Thanks again!