ES Daily Plan | November 26, 2024

My preparations and expectations for the upcoming session.

Nov 25, 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 gapped higher, reaching the initial upside target of 6015 during the Asian hours, which stalled the upside momentum. The market consolidated around the 6015 level for most of the overnight session, except in the hour leading up to the RTH open, which saw an impulsive move higher, tagging and exceeding the final upside target at 6025.

The overnight strength led the RTH session to open with a true gap up above the 6025 level. After a quick dip that found buyers, the opening level was regained, followed by a break of the overnight high—two crucial references when gapping higher. The most bullish outcome in this scenario is sustaining a move above the overnight high, while failure to do so opens the door to corrective activity. The key question today was whether it was appealing to chase a potentially strong outcome, given that all upside targets had already been reached. I prefer to let the market come to me and avoid chasing it at unfavorable locations. Sometimes the market will continue without me, and that’s fine, but other times patience will be rewarded.

Buyers failed to hold above the ON high, with a passive seller sitting at 6039. Once back below the ON high, aggressive selling pressure entered, driving prices lower. The gap was filled during the F-period, testing the Smashlevel at 5991 in the process. Despite one-time framing down intraday for the initial seven periods, the session is not necessarily bearish if sellers fail to gain traction within the prior day’s range, creating potential trade opportunities for patient traders. The trade location for a long around 5991 was much more appealing than above 6025, regardless of how today's session played out.

The momentum from the end of last week carried into today's session, with the market continuing to grind higher and nearly fully traversing the upper balance early on. The expectation is to see two-sided activity within the prior balance area between 6045 and 5970, while a directional move would require acceptance outside its extremes.

In terms of levels, the Smashlevel is at 6009, marking a low volume node (LVN). Holding below this level would target 5991, with a final target at 5970 under sustained selling pressure. Failure to hold below 6009 would target today’s opening level at 6027, with a final target at the RTH ATH of 6045.25 and the ON ATH of 6053.25, respectively.

Levels of Interest

Going into tomorrow's session, I will closely observe the behavior around 6009.

Break and hold above 6009 would target 6027 / 6045 / 6053
Holding below 6009 would target 5991 / 5970

Additionally, pay attention to the following VIX levels: 15.38 and 13.82. These levels can provide confirmation of strength or weakness.

Break and hold above 6053 with VIX below 13.82 would confirm strength.
Break and hold below 5970 with VIX above 15.38 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.