ES Daily Plan | March 11, 2025
Key Levels & Market Context for the Upcoming Session.
For new followers: The yellow levels highlighted at the bottom left of the chart 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 opened with a true gap down, quickly leading to a continuation lower to test the final downside target at 5711, where buyers stepped in and triggered a reversal back to the 5750 level. Failure to reclaim 5750 was bearish intraday, as noted on the chart, setting the stage for continued weakness ahead of the RTH session.
The RTH session opened below the final downside target at 5711, making it an immediate inflection point, as discussed in the March 7 plan. The VIX had already breached its resistance level of 25.04 overnight, meaning a market that holds below 5711, with the VIX confirming weakness, is unfavorable to fade. Regular readers of this newsletter are familiar with this concept. The A-period saw an immediate push higher, testing and rejecting 5711 before downside pressure resumed. This was the best location to initiate shorts for traders who prefer not to chase further downside after large overnight moves.
The sustained weakness resulted in a break of both the Monthly (5642) and Weekly (5600) Extreme Lows; however, the 5600 level was reclaimed before the close. An immediate downside continuation to tag these levels was something we discussed in the Weekly Plan. Now, the risk-reward profile for chasing shorts is unfavorable. The 5D VPOC is 130 handles higher at 5750, adding further complexity in the short term. As always, refraining from chasing a trade is not an automatic invitation to initiate one in the opposite direction—buyers have a lot of work to do. The first step is returning within last week’s range, but the 5711-5721 area is the primary level that needs to be reclaimed. A VIX above 27.18 (Monthly Extreme High) maintains downside pressure. Stay nimble and avoid big bets in either direction. The major downside risk remains the 10% correction level at 5550 (or SPX 5532 ~ES 5538).
Sellers maintain firm control of the auction after negating another Friday rally, triggering a breakdown from the primary distribution between 5721 and 5823. The 10% correction level at 5550 remains the key downside risk, nearly tagged today. Buyers’ primary objective is to find acceptance back within last week’s range. Failure to do so—meaning the market continues to build value below 5673—would sustain downside pressure.
In terms of levels, the Smashlevel is at 5600, our weekly downside target. Holding above this level would target 5642, with a final target at the resistance area between 5670 and 5680 under sustained buying pressure—a crucial area for sellers to defend. Conversely, failure to hold above 5600 would target 5580, with a final target at 5550 under sustained selling pressure—the 10% correction level.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5600.
Holding above 5600 would target 5642 / 5670 / 5680
Break and hold below 5600 would target 5580 / 5550
Additionally, pay attention to the following VIX levels: 29.84 and 25.84. These levels can provide confirmation of strength or weakness.
Break and hold above 5680 with VIX below 25.84 would confirm strength.
Break and hold below 5550 with VIX above 29.84 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
Make sure to review the Weekly Plan, which provides a broader perspective and highlights key levels of interest to observe in the upcoming week.
10% correction 🎯
VIX around 27.18 premarket, interesting times!