ES Daily Plan | March 26, 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
Keeping it brief today, as the session was relatively uneventful and the context remains unchanged. What is the context? Last week, the market was in balance (consolidation), characterized by responsive activity, while Monday’s session saw a breakout to the upside, signaling initiating activity.
As a refresher, price can have three relationships to value: it can be above, below, or within it. "Responsive" behavior aligns with expectations, while "Initiating" behavior deviates from expectations.
Buying below value is expected and thus considered responsive activity.
Buying above value is unexpected and thus considered initiating activity.
Selling above value is expected and thus considered responsive activity.
Selling below value is unexpected and thus considered initiating activity.
For a more comprehensive understanding of these principles within the framework of Auction Market Theory (AMT), refer to CBOT - A Six-Part Study Guide to Market Profile.
Monday's breakout from the multi-day balance area after a notable true gap higher was followed by a relatively uneventful session today—a type of price action that is not uncommon as the market digests the breakout. The key takeaway is that buyers maintain short-term control of the auction, with the market currently accepting higher prices. Failure to defend the 5795-5786 support would introduce the potential for change.
In terms of levels, the Smashlevel is at 5819, marking Monday’s M-period spike base. Holding above this level targets 5848. Acceptance above 5848 targets 5865, with a final upside target at 5883 under sustained buying pressure. On the flip side, failure to hold above 5819 targets the support area between 5795 and 5786, with a final downside target at 5760 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5819.
Holding above 5819 would target 5848 / 5865 / 5883
Break and hold below 5819 would target 5795 / 5786 / 5760
Additionally, pay attention to the following VIX levels: 17.96 and 16.34. These levels can provide confirmation of strength or weakness.
Break and hold above 5883 with VIX below 16.34 would confirm strength.
Break and hold below 5760 with VIX above 17.96 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.
Thank you! And thanks for the link.
Thank you as always!