ES Daily Plan | November 1, 2024
My preparations and expectations for the upcoming session.
For new followers: The yellow levels highlighted at the bottom left of the chart 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 saw notable aggressive selling activity right out of the gate, as highlighted on my post on X. The initial downside target of 5827 was tagged to the tick during early Asian hours. The subsequent bounce was sold, with sellers defending the initial weakness. Once 5827 was taken out, the final downside target at 5801 was quickly reached, also to the tick. The 5801 level provided a slightly larger bounce; however, sellers were waiting.
In my pre-open post on X, I reiterated that 5801 was both the final intraday target and the weekly balance low, making it an unfavorable area to initiate shorts, as the pre-open bounce illustrated. However, a weak market would break and hold below 5801, potentially leading to a trend day. Why a trend day? Because breaking down from balance below 5801 and holding below the final intraday target suggests further weakness—a scenario confirmed by the VIX breaking above its resistance level of 21.66 early in the RTH session. While it was entirely reasonable to stay out of today’s session given the substantial overnight move, there was no contextual reason to work the long side unless 5801 was regained. There’s not much to say about the RTH session. It opened with a large true gap to the downside, and despite the size of the gap, the market showed no interest in any corrective activity, indicating that sellers were on a mission. The next levels of interest at 5785, 5760, and 5734 were tagged in the process, speaking of further weakness. The session essentially traversed the large distribution shown on the chart, ultimately tagging the daily MA50 in the closing session.
Today’s session saw a breakdown from the weekly balance area, shifting both the daily and weekly to one-time framing down after breaking the 5801 level, which, as discussed, had the potential to trigger a trend day. The closing session tagged the MA50 and established a downward spike, with particular short-term interest in the spike base at 5747. The weakest response would be to accept this closing weakness and target a downside continuation, while buyers aim to reject it by establishing acceptance above the spike base of 5747. However, sellers remain in the driving seat as long as the daily is one-time framing down.
In terms of levels, the Smashlevel is at 5747. Holding below this level signals weakness, targeting the prior ATH (non-back-adjusted) at 5721. Acceptance below 5721 would then target our weekly downside target at 5700, with a final target at 5675 under sustained selling pressure. Failure to hold below 5747 would target a traverse of today’s value area toward 5770, with a final target at the resistance area between 5791 and 5801 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5747.
Break and hold above 5747 would target 5770 / 5791 / 5801
Holding below 5747 would target 5721 / 5700 / 5675
Additionally, pay attention to the following VIX levels: 24.84 and 21.52. These levels can provide confirmation of strength or weakness.
Break and hold above 5801 with VIX below 21.52 would confirm strength.
Break and hold below 5675 with VIX above 24.84 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
Make sure to review the Weekly Plan, which provides a broader perspective and highlights key levels of interest to observe in the upcoming week.
Always great stuff from you Smash! Thank you!
Brilliant analysis, as always. Thank you!