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ES Daily Plan | November 15, 2023
Today’s session saw an upside continuation following a substantial true gap up, resulting in the attainment of all weekly upside targets (4525).
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.
The overnight (ON) session stayed fairly quiet before the CPI data release. Post the CPI release, the market exhibited its usual volatility, resulting in a notable move to the upside, effectively clearing all intraday upside targets.
The RTH session opened with a substantial true gap to the upside, and the market had no interest in any corrective activity. As always, this is indicative of strength and serves as a cautionary signal against fading. The challenging part of the session was the fact that all intraday upside target were achieved before the RTH open, and the VIX remained above its support level of 14.08 for the most part of the session. As regular readers are aware, these type of days are not my favorite, as it is tricky to chase further upside, while there are zero arguments for fading and going against the trend, which typically leads me to adopt a defensive approach. The initial four periods (A to D) saw very shallow pullbacks, making it hard to chase. Simultaneously, the market was approaching the Weekly Extreme High of 4525, which is not the most optimal area to initiate new longs, especially this early in the week. Today’s HOD was 4524.25.
Today’s session saw an upside continuation following a substantial true gap up, resulting in the attainment of all weekly upside targets (4525). This accomplishment is particularly noteworthy given the early stage of the week. I’ve included the complete 5D volume profile, highlighting the imbalance between the value and price. The primary objective for buyers, who maintain full control following today's true gap to the upside, is to shift the short-term value (5D VPOC) higher to confirm today’s directional move. In contrast, sellers primary objective is to end the daily one-time framing up by breaking a previous day’s low. The afternoon pullback low at 4500 is of short-term interest. Tomorrow, we have PPI and Retail Sales.
For tomorrow, the Smashlevel (Pivot) is 4500, which represents today’s afternoon pullback low. Holding above 4500, indicating continued directional conviction, would target the immediate resistance area from 4515 to the Weekly Extreme High of 4525. Break and hold above 4525 has the potential to trigger further squeezing, targeting 4540, as well as the final upside target of 4555. Break and hold below 4500 would target the support area from 4475 to the final downside target of 4465, where the weekly VWAP is also located.
Levels of Interest
Going into tomorrow's session, I will observe 4500.
Holding above 4500 would target 4515 / 4525 / 4540 / 4555
Break and hold below 4500 would target 4475 / 4465
Additionally, pay attention to the following VIX levels: 14.82 and 13.48. These levels can provide confirmation of strength or weakness.
Break and hold above 4555 with VIX below 13.48 would confirm strength.
Break and hold below 4465 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.