ES Daily Plan | March 28, 2024
Today's closing session was characterized by another instance of emotional price action, this time driving prices higher and leading to the formation of an upward spike.
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
The overnight session immediately started retracing the downward spike that was established in yesterday’s session that closed within the low volume area dividing last week’s distributions. The spike base at 5278 held at European open, resulting in an upside continuation that traversed yesterday’s initial balance range. Emotional market.
The RTH session opened at the upper end of the 2-day balance area (#2) and was met with immediate selling activity. In a quick turn of events, the initial balance (first hour of RTH) erased the gains made during the overnight session, with the B-period closing within the highlighted spike area. The aggressive sellers, with a negative delta of 12K during the initial balance, were comfortably rewarded for their efforts. The struggle to gain meaningful downside traction started in the subsequent periods. The aggression from sellers failed to push through the passive limit orders within the spike area, resulting in the formation of a poor low in the E/F-period. Observe the snapshot of the delta profile below 5278 to the right. While the AM session spent some time below 5278, the PM session did not, leaving the sellers at poor location in a challenging situation. Today's closing session was characterized by another instance of emotional price action, this time driving prices higher and leading to the formation of an upward spike, tagging the final upside target of 5308 (HOD: 5310.50).
Heading into this week, our main focus was on the double distribution established the previous week and the low volume area (LVA) dividing these distributions. Buyers have been able to remain within the upper distribution following the rejection of yesterday’s spike, which tested the LVA. Another emotional closing session today drove prices higher, forming an upward spike. Buyers aim to develop value within the 2-day balance #1, targeting new all-time highs. Conversely, sellers aim to return within today’s value, located within 2-day balance #2. Overall, buyers remain confident as long as value continues to form above the LVA.
For tomorrow, the Smashlevel (Pivot) is 5294, representing the M-period spike base. Holding above 5294, accepting the late spike, would target the significant level of 5323. Acceptance above 5323 would target an upside continuation toward 5337, as well as the final upside target of 5355. Break and hold below 5294, rejecting the late spike, would target 5284, as well as the final downside target of 5260.
Levels of Interest
Going into tomorrow's session, I will observe 5294.
Holding above 5294 would target 5323 / 5337 / 5355
Break and hold below 5294 would target 5284 / 5260
Additionally, pay attention to the following VIX levels: 13.28 and 12.28. These levels can provide confirmation of strength or weakness.
Break and hold above 5355 with VIX below 12.28 would confirm strength.
Break and hold below 5260 with VIX above 13.28 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.
this is too good
I dont trade ES but Nifty (India) but your style simply works.!
Thanks
Thank you smash, fantastic work 🤟