ES Daily Plan | November 1, 2023

Today's session resulted in a double distribution with one set of single prints in the H-period, where change took place. The profile has unfinished business at both extremes.

Visual Representation

ES Daily Plan | November 1, 2023

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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

During the early stages of overnight (ON) session, the market was cleaning up yesterday’s profile towards the initial downside target of 4174, where the downside pressure started to stall. However, in the European session, the situation swiftly changed course with the market reversing and testing yesterday's high, where late buyers got trapped.

The RTH session opened just above the Smashlevel of 4190, and the market started to sell-off immediately, prompting another test of 4174. This level once again attracted buying interest. During the first seven periods, there was essentially a battle to determine who would gain control of 4190. Buyers had trouble gaining traction above, while sellers were unable to challenge the poor low formed during the initial balance. Change took place in the H-period as buyers successfully breached the ON high, and eventually a double distribution profile was established. The initial upside target of 4209 was reached in the I-period, and simultaneously VIX breached its support level of 18.52. In such situations, I exercise caution with fades as the final upside target can act as a magnet. It's evident that the market fell short of reaching the final upside target of 4235. However, it was noteworthy how buyers remained active during pullbacks, creating challenges for reversal traders.

Today's session resulted in a double distribution with one set of single prints in the H-period, where change took place. The profile has unfinished business at both extremes. The daily is one-time framing up after breaching the 3-day balance high. I have merged the profiles from the last two 3-day balance areas on the chart, highlighting potential areas of interest. The pivotal question at this moment is whether buyers can maintain their upside momentum and establish acceptance within the upper 3-day balance area, or if sellers will negate this by re-establishing acceptance within the lower 3-day balance area. Tomorrow, we have the FOMC meeting, which, as always, is expected to bring significant volatility. FOMC events are known to have a considerable impact on the market, so it's advisable to stay nimble and consider going flat 30 minutes before the event. With plenty of opportunities likely to arise throughout the rest of the week, it's best to avoid getting caught up in the noise surrounding the FOMC announcement.

For tomorrow, the Smashlevel (Pivot) is 4200, which represents the pullback low in the K-period subsequent to the 3-day balance breakout. Holding above 4200 would target the resistance area from 4225 to 4235. Break and hold above 4235 would target the final upside target of 4254. Take note of the weekly resistance area ranging from 4235 to the Weekly Extreme High of 4265. Break and hold below 4200 would question today’s breakout and target 4190, as well as the final downside target of 4172, where there is unfinished business.

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Levels of Interest

Going into tomorrow's session, I will observe 4200.

• Break and hold above 4200 would target 4225 / 4235 / 4254

• Holding below 4200 would target 4190 | 4172

Additionally, pay attention to the following VIX levels: 19.16 and 17.14. These levels can provide confirmation of strength or weakness.

• Break and hold above 4254 with VIX below 17.14 would confirm strength.

• Break and hold below 4172 with VIX above 19.16 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 | Oct 30 - Nov 3, 2023

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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.