ES Daily Plan | March 15, 2024
Fills of Tuesday’s structure was completed today. The question now is whether this was just technical fills before proceeding higher, or if sellers have different intentions.
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.
While the overnight Asian session saw minimal activity, the European session proved to be more dynamic, marked by increased volatility as buyers breached yesterday's inside day, exploring prices above Tuesday’s high. However, this breakout was tricky to participate in due to the release of the PPI data before the RTH open. Ultimately, the market ended up returning within yesterday’s range before the RTH open.
Buyers were unable to replicate the overnight session breakout during the RTH session, finding sellers 6 ticks below the Smashlevel of 5243. This failed breakout triggered a move in the opposite direction, leading to a very quick traverse of the inside day range in the A-period—a target outlined in the guideline. During the B-period, a bounce was observed at 5203, which was 1 handle above the crucial support area (5202-5192). The interesting aspect of this 20-handle bounce was the VIX simultaneously testing its resistance area at 14.34 to the tick. Following the volatile initial balance (first hour of RTH), trading activity largely remained within the B-period range the next couple of periods, resulting in a significant A-period excess and the formation of a b-shape profile.
The big battle today took place at the lower end of the inside day range, with indications favoring sellers as the breakdown occurred during the L and M-periods. Nevertheless, buyers at the final downside target of 5192 had different plans, successfully executing a 30-handle reversal that resulted in a close within yesterday’s range.
Fills of Tuesday’s structure was completed today, following an inside day break to the downside. The question now is whether this was just technical fills before proceeding higher, or if sellers have different intentions. We carry forward unfinished business above with three closely clustered daily highs. Furthermore, today’s overnight high of 5253.50 remained untested in RTH, adding an additional layer of unfinished business.
I will use today’s afternoon rally high at 5221, coinciding with the CPI high, as my short-term pivot. Upon acceptance above, the target is the highlighted unfinished business, while holding below targets 5192 and 5180.
For tomorrow, the Smashlevel (Pivot) is 5221, representing today’s afternoon rally high, coinciding with the CPI high. Break and hold above 5221 would target the fills of today’s A-period excess toward the 3D balance high. Acceptance above 5243 would target the next level of interest situated at 5260. Holding below 5221 would target a retest of 5192, as well as the final downside target of 5180.
Levels of Interest
Going into tomorrow's session, I will observe 5221.
Break and hold above 5221 would target 5243 / 5260
Holding below 5221 would target 5192 / 5180
Additionally, pay attention to the following VIX levels: 15.02 and 13.76. These levels can provide confirmation of strength or weakness.
Break and hold above 5260 with VIX below 13.76 would confirm strength.
Break and hold below 5180 with VIX above 15.02 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.
Thanks again Smash. Per usual, your levels DO NOT MISS.
As I become more disciplined and take less trades overall, with the help of your analysis, it makes it easier to set level alerts and go on about my day.
I am fascinated by your analysis and price points. How long did it take you to absorb all of this ? Needless to say ---- i look forward to your course or book in the future. These price points are awesome. It gives an edge & confidence to trade near these area's. Thanks Smash !!!!