ES Daily Plan | May 2, 2023
The buyers managed to breach the 4-week balance high, but their attempts to reach the 3-month balance high failed, resulting in an excess high in G-period.
The crucial area of interest is between 4194-4186.
Contextual Analysis
The overnight (ON) session today was uneventful as China and Europe were closed. The trading took place at the upper end of Friday’s range, rotating around the Smashlevel of 4186. To new followers, the Smashlevel is my personal short-term pivot for the session, which is based on various contextual factors. It is important to note that this is not an automatic buy/sell level, but rather a reference point. Levels alone are not meaningful unless they are confirmed by order flow. It was interesting to see how the resistance level of 16.56 for the VIX held throughout the European hours, printing a high of 16.62.
Although the Regular Trading Hours (RTH) session opened slightly below Friday's spike base of 4186, the market showed no interest in trading within Friday's value area. The buyers' primary target was the 4-week and 3-month balance high, and they accomplished the former in A-period already. As a result, the weekly is now one-time framing up. However, in the PM session, their attempts to reach the 3-month balance high failed, resulting in an excess high in G-period. The buyers want to breach that excess fairly quickly. Of note, the ON high of 4198.25 from the 4/18 session has now been retested during regular trading hours and Friday’s imbalanced profile to the upside has been resolved.
Following the unsuccessful attempt to test the monthly balance high, the session endured weakness for the rest of its duration, eventually closing back within Friday's value area. The daily is one-time framing up with the weekly, and the monthly remains in balance, as mentioned. The crucial area of interest is between 4194-4186, which the sellers must defend to trigger additional weakness. The primary downside targets are the afternoon pullback low of 4171 and the downside magnet of 4155, where the medium and long-term value is located. Conversely, the buyers want to negate any potential look above the 4-week balance (4194.75) and fail scenario by regaining and establishing acceptance above 4194 to challenge today’s excess high.
Going into tomorrow's session, I will observe 4186.
Break and hold above 4186 would target 4194 / 4208 / 4220
Holding below 4186 would target 4171 / 4155
Additionally, pay attention to the following VIX levels: 16.90 and 15.26. These levels can provide confirmation of strength or weakness.
Break and hold above 4220 with VIX below 15.26 would confirm strength.
Break and hold below 4155 with VIX above 16.90 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.
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 | May 1-5, 2023
🟩 Daily: OTFU | Ends: 4143.75 🟨 Weekly: BALANCE | 4-Week | H: 4194.75 L: 4068.75 🟨 Monthly: BALANCE | 3-Month | H: 4208.50 L: 3814.50 Weekly Extreme High: 4280 Weekly Extreme Low: 4095 As usual, a detailed daily plan will be published tomorrow.
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.
Looks like a session weak hands getting stopped out in turns. G and M excess leaving no regret behind!