ES Daily Plan | June 18, 2024
Today’s session unfolded as a multi-distribution trend day, marked by five (!) sets of single prints. The question now is whether we will observe an immediate upside continuation, or balance.
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
Just a quick reminder that I have transitioned to the ESU24 (September). Please note that I do not back-adjust my charts. I suggest marking the ESM24 (June) settlement at 5437.50 on your chart, as roll gaps often tend to get filled. Regardless of whether you choose to back-adjust or not, the crucial point is that my intraday targets remain the same.
The overnight session was balanced, primarily remaining below Friday’s ESU24 settlement at 5502.25, with the exception of a brief push higher following the European open. In contrast to the relatively uneventful overnight activity, the RTH session saw a significant upward move, continuing the current upward trend. During the initial balance, the market held below 5502.25 (IB High: 5503). Notably, the VIX tested its resistance level of 13.20 (actual: 13.27) during today’s LOD established in the A-period.
In the subsequent C and D periods, initiative buyers entered the market, driving prices higher. Our upside target of 5530-5540 was achieved during the G and H periods. I generally avoid chasing when the market becomes overly emotional, especially beyond the intraday targets. If you hadn't already entered a long trade by the time we reached 5540, it wasn't optimal to start chasing further upside. Those who did so actually got away with it today, thanks to the overall trend; however, during the closing session, there was a pullback, and the market nearly retraced back to 5540 (5544).
Today’s session unfolded as a multi-distribution trend day to the upside, marked by five (!) sets of single prints. The question now is whether we will observe an immediate continuation to the upside, aiming for our weekly targets, or a potential period of balance. The largest set of single prints occurred during the F-period, and remaining above this area keeps buyers in a very comfortable position. Just a reminder, markets are closed on Wednesday.
For tomorrow, the Smashlevel (Pivot) is 5550, representing the J-period pullback that was breached during the M-period. Break and hold above 5550, signaling strength, would target an upside continuation toward 5565, as well as the final upside target of 5580. Reminder that the Monthly Extreme High (June) is located at 5565. Holding below 5550 would target fills of today’s poor structure toward the support area from 5525 to the final downside target of 5515. In the case of continued weakness, the target is filling the D and C-period single prints toward the IB high.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5550.
Break and hold above 5550 would target 5565 / 5580
Holding below 5550 would target 5525 / 5515
Additionally, pay attention to the following VIX levels: 13.32 and 12.18. These levels can provide confirmation of strength or weakness.
Break and hold above 5580 with VIX below 12.18 would confirm strength.
Break and hold below 5515 with VIX above 13.32 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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