ES Daily Plan | November 14, 2024

My preparations and expectations for the upcoming session.

Nov 13, 2024

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 tested and found support at the initial downside target of 5994, resulting in a solid bounce. Beyond this, activity was relatively muted as the market awaited the CPI data release. As always, following the release, volatility increased; however, the market remained within Tuesday’s range.

The RTH session opened near the 6014 pivot, with sellers initiating the first impulsive move about 20 minutes into trading. The subsequent bounce was quickly met by sellers at 6014, pushing lower for another test of the 5994 level. This was all sellers got today, as the look below and fail of both the 5994 level and the overnight low of 5993 triggered a reversal with pace. Although sellers initially defended the 6014 level again, they ultimately failed to sustain the resistance, leading to a test of 6034, which capped today’s upside, forming an inside day.

In response to the question regarding my view on the poor structure below, including the significant gap between 5900 and 5813: Poor structure often accompanies strong directional moves. The stronger the market, the less likely this structure will be revisited or “cleaned up” in the short term. As I navigate the market on a day-by-day basis, this cleanup remains a reference point, becoming relevant again only if the market shows signs of weakness. Currently, the market is balancing and accepting higher prices, indicating continued strength and favoring an upside continuation. A successful balance breakdown, with rejection of the area participants currently perceive as fair value and acceptance into last week's middle distribution, has the potential to shift the market tone.

The daily came into balance yesterday, following the cessation of the one-time framing up. Today’s session was characterized by responsive two-sided activity, forming an inside day with the extremes capped by our initial targets. Balance guidelines apply, with immediate attention on the inside day. To reiterate, the market is currently accepting higher prices after a strong directional move, keeping buyers in control. Only a balance breakdown with acceptance into last week's middle distribution brings potential for change. PPI tomorrow.

In terms of levels, the Smashlevel is at 6014. Holding below this level would target 5994, with a final target at the unfilled gap at 5967 under sustained selling pressure. Failure to hold below 6014 would target 6034, with a final target at 6053.25, marking the overnight ATH, under sustained buying pressure.

Levels of Interest

Going into tomorrow's session, I will closely observe the behavior around 6014.

Break and hold above 6014 would target 6034 / 6053
Holding below 6014 would target 5994 / 5967

Additionally, pay attention to the following VIX levels: 14.70 and 13.34. These levels can provide confirmation of strength or weakness.

Break and hold above 6053 with VIX below 13.34 would confirm strength.
Break and hold below 5967 with VIX above 14.70 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.