ES Daily Plan | May 6, 2024
As noted in the weekly plan, the current short-term area of interest is the main distribution from last week, highlighted in blue.
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 early weakness on Thursday lacked downside continuation, resulting in a reversal and a close at session highs. The upside momentum carried into Friday as the market opened with a large true gap higher, above the significant high volume node (HVN) at 5103.
As noted in the weekly plan, the current short-term area of interest is the main distribution from last week, highlighted in blue. Buyers aim to maintain within this distribution, signaling strength and favoring further upside, with targets set at 5174 and 5194. Conversely, sellers aim to quickly reject Friday’s move by establishing acceptance below its halfback and targeting the support area ranging from 5127 to 5117.
For tomorrow, the Smashlevel (Pivot) is 5147, representing Friday’s halfback. Holding above 5147 would target the immediate resistance area from 5164 to 5174. Break and hold above 5174 would target the prior 3-week balance low of 5194. Break and hold below 5147 would target the support area from 5127 to the final downside target of 5117. In the case of continued weakness, the unfilled daily gap is situated at 5100.75.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5147.
Holding above 5147 would target 5164 / 5174 / 5194
Break and hold below 5147 would target 5127 / 5117
Additionally, pay attention to the following VIX levels: 14.04 and 12.94. These levels can provide confirmation of strength or weakness.
Break and hold above 5194 with VIX below 12.94 would confirm strength.
Break and hold below 5117 with VIX above 14.04 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 great week.