ES Daily Plan | March 25, 2024
While the Monthly and Weekly time frame continue one-time framing up, the daily has returned to short-term balance after breaking Thursday’s low.
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
I decided to wrap up the week after Thursday's session, given that we not only met but also exceeded our weekly targets. As it turns out, I didn't miss out on much. On Friday, the market returned to the prior Weekly Extreme High of 5290—highlighting the importance of exercising caution when entering trades outside the Weekly Extremes to prevent emotional reactions from taking over.
While the Monthly and Weekly time frame continue one-time framing up, the daily has returned to short-term balance after breaking Thursday’s low. Currently, the daily is in a 2-day balance, marking the upper distribution from the previous week.
The general guideline suggests going with the break of the highlighted 2-day balance area and monitoring for continuation (Acceptance) or lack thereof (Rejection). If there's a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction. As outlined in the Weekly Plan, remaining within the current 2-day balance area would signal strength, favoring an upside continuation. In the event of weakness, the target is fills of the low volume area from the FOMC breakout, dividing last week’s distributions. Keep a close eye on buyers' ability to shift the short-term value (5D VPOC) higher, currently at 5230, which would indicate acceptance.
For tomorrow, the Smashlevel (Pivot) is 5290, representing the 2-day balance low. Holding above 5290 would target 5308, as well as a full traverse toward the significant level of 5323. Break and hold above 5323 would target the final upside target of 5337. Break and hold below 5290 would target a traverse of Wednesday’s upper distribution toward 5273, as well as the final downside target of 5260, coinciding with the Weekly VWAP.
Levels of Interest
Going into tomorrow's session, I will observe 5290.
Holding above 5290 would target 5308 / 5323 / 5337
Break and hold below 5290 would target 5273 / 5260
Additionally, pay attention to the following VIX levels: 13.60 and 12.52. These levels can provide confirmation of strength or weakness.
Break and hold above 5337 with VIX below 12.52 would confirm strength.
Break and hold below 5260 with VIX above 13.60 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, pal! Here's to another week of success!
Excellent!