ES Daily Plan | June 25, 2024
The immediate focus is on observing whether the prices of the spike will be accepted or rejected, following today's outside day down.
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 saw early liquidation during Asian hours, testing the support area from 5525 to 5515, and finding responsive buyers within Friday’s excess low. This liquidation was fully retraced, and buyers managed to test the highlighted resistance area from 5546 to 5556. The Smashlevel, our pivot for the session, was at 5546, which was tagged to the tick during the European session, attracting sellers.
The initial 10 minutes of the RTH session fluctuated around the opening price. Sellers then initiated a push lower, which was absorbed before reaching Friday’s excess low and our support area. The counter move that followed was vicious, to say the least. After reclaiming the opening level, we witnessed a 30-handle squeeze with virtually no pullbacks, resulting in another test of our resistance area. However, as seen on the chart, there was limited trading interest above 5556. Early in the B-period, the delta for the day was +6K; by the end of the B-period, it had swung to -6K, highlighting the entry of aggressive sellers following the initial squeeze. Despite heavy aggressive selling, the market consolidated within the resistance area for a couple of periods, setting the stage for another potential squeeze attempt, fueled by the significant selling activity. However, this scenario failed to materialize, marking what seemed like a shift in dynamics. It remains to be seen if sellers can sustain downside pressure following the weakness observed in the afternoon session. We have now filled three of the five sets of single prints from Monday’s multi-distribution trend day.
Today’s initial upside momentum tested resistance, formed an excess high, and later resulted in an outside day to the downside, effectively filling the F-period single prints from last Monday. The immediate focus is on observing whether the prices of the spike will be accepted or rejected. Trading within or below the highlighted spike area (acceptance) is a more favorable outcome for sellers, while buyers would ideally reject today’s closing weakness by establishing acceptance above the spike base of 5523.
For tomorrow, the Smashlevel (Pivot) is 5523, representing the M-period spike base. Break and hold above 5523, indicating rejection, would target the LVN at 5535. Acceptance above 5535 would target a retest of the resistance area from 5546 to 5556. Holding below 5523, indicating acceptance, would target 5497, effectively filling the remaining single prints from 6/17. Acceptance below 5497 signals intraday bearish momentum, targeting the support area from 5475 to 5465.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5523.
Break and hold above 5523 would target 5535 / 5546 / 5556
Holding below 5523 would target 5497 / 5475 / 5465
Additionally, pay attention to the following VIX levels: 13.90 and 12.76. These levels can provide confirmation of strength or weakness.
Break and hold above 5556 with VIX below 12.76 would confirm strength.
Break and hold below 5465 with VIX above 13.90 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.
At one moment it was so interesting to observe that market had decent size of excess on both sides formed by A and B!
Thanks Smash!