ES Daily Plan | June 21, 2024
Sellers managed to fill two of Monday’s five sets of single prints following a true gap higher that failed to find acceptance. However, Monday’s F-period single prints remain intact.
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.
After Monday's session, I noted that if there is an immediate upside continuation without a meaningful pullback first, I would exercise caution in initiating new longs as we approach the Weekly Extreme High of 5595. Tuesday’s session showed no interest in filling any poor structure, and today, the overnight session saw an immediate upside continuation. We came within 7 handles of 5595, with an overnight high at 5585, before a reversal unfolded.
Despite retracing a good portion of the overnight gains, the RTH session opened with a true gap up, although the opening level was below the full session VWAP. The opening bounce tested the FS VWAP, where heavy aggressive buying was absorbed by passive sellers. Absorption alone is not enough for a reversal to take place. That’s why it was interesting to observe aggressive sellers entering after the absorption, confirming the reversal. A replay will be available on Substack for reference. The gap was filled during the B-period, and buyers successfully defended Tuesday’s high for several periods. However, it was notable how each bounce attempt failed to reclaim the opening level. It was interesting to observe the VIX remaining above its resistance of 12.84 for most of the RTH session, especially noteworthy was its resilience above 12.84 during the early bounce attempts.
Sellers eventually managed to follow through to the downside in the F-period, quickly traversing Tuesday’s range, which we treated as an inside day. The weakness following the failed gap higher filled two of Monday’s five sets of single prints, stopping just 2 ticks shy of the highlighted support area from 5525 to 5515, where a bounce unfolded. This bounce failed to negate today’s double distribution profile, with an afternoon rally high at 5556. Buyers managed to shift the short-term value (5D VPOC) higher from 5440 to 5554.
Sellers managed to fill two of Monday’s five sets of single prints following a true gap higher that failed to find acceptance. However, Monday’s F-period single prints remain intact, which keeps buyers rather comfortable as they continue to establish value higher. I will use today’s afternoon rally high as my short-term reference point. Upon acceptance above, the target will be a revisit of the overnight ATH at 5588. Failure to do so would open the door for more fills of Monday’s poor structure.
For tomorrow, the Smashlevel (Pivot) is 5556, representing today’s afternoon rally high. Break and hold above 5556 would target the today’s opening level at 5570. Acceptance above 5570 would then target the resistance area from 5585 to the Weekly Extreme High at 5595. Holding below 5556 would target the support area from 5525 to the final downside target of 5515.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5556.
Break and hold above 5556 would target 5570 / 5585 / 5595
Holding below 5556 would target 5525 / 5515
Additionally, pay attention to the following VIX levels: 13.84 and 12.70. These levels can provide confirmation of strength or weakness.
Break and hold above 5595 with VIX below 12.70 would confirm strength.
Break and hold below 5515 with VIX above 13.84 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.
NQ retraced all the breakout move from Monday and filled all the singles I believe. S1 dumped a ton load of NVDA at noon.
Interestingly 45 capped the upside of rth, a whole day of opening level seesawing!