Visual Representation
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.
Contextual Analysis
Just a quick reminder that I have transitioned to the ESM24 (June) contract. Please note that I do not back-adjust my charts. On the chart, I have marked the settlements for both ESH24 (March) (5129) and ESM24 (June) (5192.50) from Friday’s session (+63.50 difference). I suggest marking 5129 on your chart, as roll gaps often tend to get filled. Whether you choose to back-adjust or not, the crucial point is that my intraday targets remain the same.
Buyers attempted to reclaim the Smashlevel of 5192 early in the overnight session but were unsuccessful. The inability to gain traction above Friday’s ESH24 high led to weakness, eventually resulting in a test of the highlighted support area ranging from 5165 to 5155 (ONL: 5166).
The RTH session opened within Friday’s initial balance range, and the first period (A) was characterized by aggressive selling, resulting in a negative delta of 3K. The VIX stayed above its resistance level of 15.42 throughout the overnight session and the initial periods of RTH. When the VIX is elevated, buyers typically prefer to observe immediate strength in RTH, aiming for the VIX to drop below its resistance. Otherwise, the final downside target might act as a downside magnet. The support area from 5165 to 5155 was marked as a crucial area for buyers to maintain, suggesting it was a good location to book profits if short, and a potential area for buyers to enter. The B-period was interesting as it came within 2 handles from the final downside target of 5155, forming a lower low with a positive delta of 4K. The 5155 level served as a good level for managing risk, as a break and hold below it had potential for further weakness due to an elevated VIX. The remainder of the session saw a slow upward grind towards the Smashlevel of 5192 (HOD: 5191.50).
The final downside target for today was 5155. We came within two handles before a reversal unfolded, bringing us back to Friday’s ESM24 settlement at 5192, which remains my short-term pivot. The CPI data is scheduled for release tomorrow, and as usual, it is expected to bring volatility to the market. Therefore, the potential for moves outside of the intraday targets increases. Stay nimble.
For tomorrow, the Smashlevel (Pivot) is 5192, representing Friday’s ESM24 (June) settlement. Break and hold above 5192 would target the resistance area from 5220 to the final upside target of 5230. Holding below 5192 would target the support area from 5165 to the final downside target of 5155—a crucial area for buyers to maintain.
Levels of Interest
Going into tomorrow's session, I will observe 5192.
Break and hold above 5192 would target 5220 / 5230
Holding below 5192 would target 5165 / 5155
Additionally, pay attention to the following VIX levels: 15.94 and 14.48. These levels can provide confirmation of strength or weakness.
Break and hold above 5230 with VIX below 14.48 would confirm strength.
Break and hold below 5155 with VIX above 15.94 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.
Thank you, buddy! Another great day for scalps.
Missed ya man! ❤️🙏🏼