ES Daily Plan | May 15, 2024
With today's breakout from the short-term balance and the formation of a double distribution profile, the conditions are now quite straightforward.
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
The overnight session remained uneventful until the release of the PPI data. Following the data release, there was an initial downward reaction marked by a quick drop that came within four handles of the final downside target of 5213 (ONL: 5216.75). This move was completely retraced before the opening of the RTH session, highlighting the challenging nature of breakdowns to succeed within a prevailing uptrend. The main thing was to not get emotional and chase the downside as 5213 was nearing.
The RTH session initially appeared to be setting up for another inside day, with the market trading within yesterday’s range up until the J-period. However, during the K-period, prices began to move higher, ultimately breaking above yesterday’s weak high and forming single prints in the process. Buyers successfully shifted the short-term value (5D VPOC) higher from 5213 to 5246.
With today's breakout from the short-term balance and the formation of a double distribution profile, the conditions are now quite straightforward, particularly emphasizing the set of single prints formed during the K-period, which aligns with the prior daily highs. The strongest response from the market would involve maintaining within the upper distribution > 5266, favoring an upside continuation toward 5285, 5297 and 5307. Failure to do so would open the door for filling the low volume area toward 5260. Re-entering today’s lower distribution would target a quick drop to 5246, while the weakest response would be acceptance below this high volume node. CPI on deck tomorrow.
For tomorrow, the Smashlevel (Pivot) is 5266/5260, representing today’s K-period single prints. Holding above 5266, signaling strength, would target 5285, marking the J-period breakdown single prints from April 4th. Acceptance above 5285 would then target the resistance area from 5297 to 5307. In the case of continued strength, the all-time high (RTH) is located at 5322.75. Break and hold below 5260 would target the short-term value (5D VPOC) at 5246. Acceptance below 5246, signaling weakness, would target the final downside target of 5227.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5266/5260.
Holding above 5266/5260 would target 5285 / 5297 / 5307
Break and hold below 5266/5260 would target 5246 | 5227
Additionally, pay attention to the following VIX levels: 13.96 and 12.84. These levels can provide confirmation of strength or weakness.
Break and hold above 5307 with VIX below 12.84 would confirm strength.
Break and hold below 5227 with VIX above 13.96 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
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.
RTH opening level was very pivotal today also the vicious vix crush!