ES Daily Plan | June 3, 2024
As outlined in the Weekly Plan, the primary short-term focus will be on monitoring whether the prices of the spike will be accepted or rejected.
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
On Thursday, sellers initiated a directional move away from value, effectively ending the weekly one-time framing up. Friday’s session initially saw a downside continuation; however, a vicious reversal unfolded during the afternoon session, resulting in an outside day up and forming a large M-period spike highlighted on the chart.
As outlined in the Weekly Plan, the primary short-term focus will be on monitoring whether the prices of the spike will be accepted or rejected. Trading within or above the spike area (acceptance) is a more favorable outcome for buyers, while the most favorable outcome for sellers would involve rejecting Friday’s closing strength by establishing acceptance below the spike base of 5270.
For tomorrow, the Smashlevel (Pivot) is 5300, representing Friday’s M-period high. Break and hold above 5300, signaling strength, would target the high volume node (HVN) at 5323. Acceptance above 5323 would then target the final upside target of 5342. Holding below 5300 would target fills of Friday’s M-period spike toward the support area from 5280 to 5270, where the spike base, Weekly VWAP, and MA20 are located. Break and hold below 5270, signaling weakness, would target the final downside target of 5253.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5300.
Break and hold above 5300 would target 5323 / 5342
Holding below 5300 would target 5280 / 5270 / 5253
Additionally, pay attention to the following VIX levels: 13.54 and 12.28. These levels can provide confirmation of strength or weakness.
Break and hold above 5342 with VIX below 12.28 would confirm strength.
Break and hold below 5253 with VIX above 13.54 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.
Interesting to see how vix break its resistance!