ES Daily Plan | June 5, 2024
The market continues to spend most of its time and volume within Friday’s highlighted spike area, which is bullish in the context of Friday’s closing strength.
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
Given the uneventful nature of today's session and the unchanged context, an extensive analysis is unnecessary. Both overnight and RTH trading activity remained within Monday’s range, resulting in the formation of an inside day. While an inside day doesn't technically end the daily one-time framing up, it does suggest short-term balance.
The market continues to spend most of its time and volume within Friday’s highlighted spike area, which is bullish in the context of Friday’s closing strength. I’ve included the TPO chart of Friday’s session, with Monday’s and Tuesday’s sessions merged, to highlight where value has been established this week relative to Friday's spike area. For now, buyers maintain short-term control until we observe sellers establishing value below the spike base. However, price exploration above Friday’s high has encountered passive sellers thus far. Notable order flow activity was observed today at both 5305 and 5310.
Today's session formed an inside day, with the price range contained within the previous day's range. The upper extreme is weak against Monday’s high, and the lower extreme is considered weak due to its close alignment with Friday’s M-period spike base. The general guideline suggests going with the break of the inside day and observing for continuation or lack thereof.
For tomorrow, the Smashlevel (Pivot) is 5300, representing Friday’s M-period high. Holding 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. Break and hold below 5300 would target the support area from 5280 to 5270, where the spike base and prior Weekly VWAP 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.
Holding above 5300 would target 5323 / 5342
Break and hold below 5300 would target 5280 / 5270 / 5253
Additionally, pay attention to the following VIX levels: 13.76 and 12.58. These levels can provide confirmation of strength or weakness.
Break and hold above 5342 with VIX below 12.58 would confirm strength.
Break and hold below 5253 with VIX above 13.76 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.
Persistant selling in the morning session yet no interest below 70!
Thanks Smash!