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ES Daily Plan | November 13, 2023
On Friday, the market established a multi-distribution profile following a breakout from both the 5-day balance area and the October high. Monitor for continuation or lack thereof.
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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.
On Friday, the market established a multi-distribution profile following a breakout from both the 5-day balance area and the October high, effectively putting an end to the Monthly one-time framing down. As is typical with any breakout scenario, the primary focus is to closely monitor for continuation (Acceptance) or lack thereof (Rejection).
In the case of acceptance of Fridays breakout, the primary upside target is the unfilled daily gap at 4446, followed by the highlighted resistance area ranging from 4465 to 4475. Conversely, a rejection opens the door for fills of Friday’s breakout structure towards the support area from 4400 to 4390—a crucial area for buyers to maintain.
For tomorrow, the Smashlevel (Pivot) is 4423, which represents the prior 5-week balance high as well as the October high. Holding above 4423 would target the unfilled daily gap at 4446. Break and hold above 4446 would target the resistance area from 4465 to the final upside target of 4475, which represents the prior Weekly Extreme High. Break and hold below 4423 would target fills of Friday’s poor structure towards the support area from 4400 to the final downside target of 4390. In the case of continued weakness, the target is a full traverse of the 5D composite value area towards 4375.
Levels of Interest
Going into tomorrow's session, I will observe 4423.
Holding above 4423 would target 4446 / 4465 / 4475
Break and hold below 4423 would target 4400 / 4390
Additionally, pay attention to the following VIX levels: 14.82 and 13.52. These levels can provide confirmation of strength or weakness.
Break and hold above 4475 with VIX below 13.52 would confirm strength.
Break and hold below 4390 with VIX above 14.82 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.
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.