ES Daily Plan | March 8, 2024

Today’s session formed a double distribution trend day, printing a new ATH at 5170.50. This came after an initial rejection from the LVA following a true gap higher.

Visual Representation

ES Daily Plan | March 8, 2024

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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.

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Contextual Analysis

This week's overnight sessions have delivered notable moves, and today's session was no exception. Sellers attempted to gain traction within Tuesday’s lower distribution during both the Asian and European hours, yet both attempts drew in buyers who successfully reclaimed 5099. Observing the chart, we can see how Wednesday’s session didn’t give Tuesday’s sellers from the lower distribution a chance to get out. The overnight session continued on this pattern, resulting in a European session that was characterized by one-sided activity (sellers throwing in the towel).

The RTH session opened with a true gap to the upside, above the highlighted low volume area (LVA) we discussed in the previous plan. Very similar to yesterday, the market opened (5143) close to the final upside target of 5149, looked above the ONH, coming within 4 ticks of 5149, and failed—resulting in a counter-move. This move (inventory correction) resulted in the gap getting filled, which coincided with the low volume area. As always, if the gap is filled, it's crucial to monitor whether acceptance can be established within the prior day's range, indicating a bearish outcome. Failure to do so always leaves the door open for strength later in the session. Buyers typically aim to reclaim two key references following an inventory correction: the open level and the overnight high. Ideally, once these levels are reclaimed, buyers prefer not to see them tested again. Buyers managed to break the final upside target of 5149, with VIX not confirming the strength by holding above its support.

Personally, I wasn’t very interested in chasing above 5149 with both the daily and weekly in balance at the time, with all intraday targets achieved. The best trade location for a long was obviously the gap-fill. If executed, there was potential for runners, considering the context of a possible directional move with acceptance beyond the low volume area. Buyers did manage to reach the next level of interest at 5165, and a liquidation break occurred in the PM session, reminiscent of yesterday's, albeit less extensive. The 5149 level was later revisited during after-hours trading, which was interesting.

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Acceptance beyond the low volume area (LVA) held the potential for a directional move. Today’s session formed a double distribution trend day, printing a new ATH at 5170.50. This came after an initial rejection from the LVA following a true gap higher. The very small set of single prints in the B-period, coinciding with the previous week’s high, serves as my short-term reference point. The strongest response would involve maintaining above it, targeting an upside continuation. Acceptance below 5149 would open the door for a retest of the LVA, with the weakest response involving a return within the prior month’s range < 5123, where the Monthly VWAP is also located. NFP on deck tomorrow. ,

For tomorrow, the Smashlevel (Pivot) is 5149, representing the previous week’s high, coinciding with today’s single prints in the B-period. Holding above 5149, signaling strength, would target 5165, 5182 and 5195. Break and hold below 5149 would target the support area from 5133 to the final downside target of 5123—a crucial area for buyers to maintain.

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Levels of Interest

Going into tomorrow's session, I will observe 5149.

• Holding above 5149 would target 5165 / 5182 / 5195

• Break and hold below 5149 would target 5133 / 5123

Additionally, pay attention to the following VIX levels: 15.08 and 13.82. These levels can provide confirmation of strength or weakness.

• Break and hold above 5195 with VIX below 13.82 would confirm strength.

• Break and hold below 5123 with VIX above 15.08 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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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.

ES Weekly Plan | Feb 26 - Mar 1, 2024

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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.