ES Daily Plan | May 13, 2024
In terms of immediate focus, I’m observing 5250, where notable order flow activity was observed during Friday’s closing session.
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.
Visual Representation
Contextual Analysis
On Friday, the market reached our weekly upside target (Weekly Extreme High: 5260) already during the overnight session, which made it tricky to be a late chaser in the RTH session. The market saw a look above the ON high of 5260.75 and fail, which triggered weakness. I published a brief recap of this sequence on Substack—ES Daily Recap | May 10, 2024. Take note of how the market resolved the highlighted upside imbalance from Thursday during Friday’s session. In an uptrend, these imbalanced profiles often tend to get ”cleaned up”.
Despite the weakness observed during Friday's RTH session, the daily upside imbalance phase initiated on Thursday remains intact. The primary objective for sellers is to end the daily one-time framing up by taking out Friday’s low of 5232.75, while buyers aim to continue establishing value higher. In terms of immediate focus, I’m observing 5250, where notable order flow activity was observed during Friday’s closing session. A replay of this closing sequence will be available on Substack.
For tomorrow, the Smashlevel (Pivot) is 5250, where notable order flow activity was observed during Friday’s closing session. Please refer to the attached snapshot of the footprint chart. Break and hold above 5250 would target structural fills toward 5262. Acceptance above 5262, signaling strength, would then target the final upside target of 5285, marking the J-period breakdown single prints from April 4th. Holding below 5250 would target Thursday’s afternoon pullback low at 5227, aligning with the high of the prior 3-day balance. Acceptance below 5227 would then target the short-term value (5D VPOC) at 5213, acting as a downside magnet in the absence of an upside continuation.
ICYMI
A replay of Thursday’s pullback in the E-period against the initial balance high and the RTH VWAP, highlighting how aggressive selling activity was absorbed by passive buyers, ultimately resulting in a reversal.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5250.
Holding above 5250 would target 5262 / 5285
Break and hold below 5250 would target 5227 / 5213
Additionally, pay attention to the following VIX levels: 13.28 and 12.02. These levels can provide confirmation of strength or weakness.
Break and hold above 5285 with VIX below 12.02 would confirm strength.
Break and hold below 5213 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.
Thank you, buddy, let's have another tremendous week.
Thanks. The video replays have been really helpful. Any chance you’re going to update your chartbooks for the candle format on your footprint?