ES Daily Plan | June 28, 2024
Balance remains. Tomorrow, we have the PCE data release before the market opens, which could potentially catalyze a directional move.
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
Price can have three relationships to value: it can be above, below, or within it. "Responsive" behavior aligns with expectations, while "Initiating" behavior deviates from expectations.
• Buying below value is expected and thus considered responsive activity.
• Buying above value is unexpected and thus considered initiating activity.
• Selling above value is expected and thus considered responsive activity.
• Selling below value is unexpected and thus considered initiating activity.
For a more comprehensive understanding of these principles within the framework of Auction Market Theory (AMT), consider exploring 'CBOT - A Six-Part Study Guide to Market Profile'.
On the chart, we can observe how expected responsive activity continues to be the dominant theme. During the overnight session, there was an attempt to push below the highlighted value of the multi-day balance area, which was met by responsive buyers successfully bringing the price back to value. Conversely, early in the RTH session, an attempt was made above the value area, but it failed to sustain momentum and was met by responsive sellers. This illustrates that the market continues to maintain a balanced state on the daily chart, while the weekly and monthly time frames are still one-time framing up. Tomorrow, we have the PCE data release before the market opens, which could potentially catalyze a directional move.
“As a general rule, the longer a consolidation phase lasts, the more significant the subsequent breakout tends to be. In the event of acceptance outside the value area, we have carried forward the overnight ATH at 5588 as a target on the upside, and two sets of single prints from the trend day on the 17th as potential targets on the downside.”
For tomorrow, the Smashlevel (Pivot) is 5552, representing multi-day value area high. Break and hold above 5552 would target 5570. Acceptance above 5570 signals intraday bullish momentum, targeting the final upside target of 5588, marking the ON ATH. Holding below 5552 would target the support area from 5525 to 5515. Acceptance below 5515 signals intraday bearish momentum, targeting the 5497, effectively filling the remaining single prints from 6/17.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5552.
Break and holdabove 5552 would target 5570 / 5588
Holding below 5552 would target 5525 / 5515 / 5497
Additionally, pay attention to the following VIX levels: 12.76 and 11.72. These levels can provide confirmation of strength or weakness.
Break and hold above 5588 with VIX below 11.72 would confirm strength.
Break and hold below 5497 with VIX above 12.76 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.
Tempting to long off the "bottoms" but 22 may come out!
Thanks 😊