ES Daily Plan | March 29, 2023

There is not much to add after today. The levels remain the same, and the market is waiting for more MGI.

When the market lacks a clear directional conviction, it’s crucial to not overstay your welcome in any trade.

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Contextual Analysis

Throughout the Asian session, the market traded within an extremely tight range that was contained within the previous day's value area. As soon as the European session opened, the pace of market activity picked up, and buyers attempted to explore prices above the Smashlevel of 4020. This attempt was swiftly rejected, with an ON high of 4023.75, which then led to a phase of weakness. As a result of this weakness, prices probed below the previous day's low, effectively resolving the unfinished business that was left unaddressed. Keep in mind that repair of structure is generally only valid during regular trading hours (RTH). However, there are instances where the market can efficiently address these issues overnight, as was seen in the ON session of 3/20. During this session, the market successfully resolved the weak structure that existed from 3/16-17, and which still remain unresolved during RTH.

Today's trading session was similar to that of yesterday's, with the market trading within a narrow range. Sellers tried to create a double distribution to the downside during both the C and I-period, but their efforts were ultimately unsuccessful. The weekly level of 3990 was tested almost to the tick in C-period, and provided a decent bounce. The seller's second attempt to break and hold below 3990 in I-period was met with heavy aggressive buying. Just like yesterday, the market formed a poor low that prompted a reversal. The buyers' efforts below 3990 were rewarded, and after regaining that level, the market almost completed a full traverse of the value area before the close.

After today's session, there is not much to add. The levels remain the same, and the market is currently in balance across all time frames, awaiting further market-generated information. When the market lacks a clear directional conviction, it’s crucial to not overstay your welcome in any trade. This is the second consecutive session where sellers' attempts to establish a double distribution to the downside have been unsuccessful, resulting in another poor low. The short-term level of interest is the well-known 4005 level, where the current weekly VWAP is also located.

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Going into tomorrow's session, I will observe 4005.

• Break and hold above 4005 would target 4020 / 4030 / 4048

• Holding below 4005 would target 3990 / 3970 / 3952

Additionally, pay attention to the following VIX levels: 21.14 and 18.80. These levels can provide confirmation of strength or weakness.

• Break and hold above 4048 with VIX below 18.80 would confirm strength.

• Break and hold below 3952 with VIX above 21.14 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.

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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.

ES Weekly Plan | March 27-31, 2023

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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. Twitter: @smashelito | FAQ: smashelito.com