ES Daily Plan | November 27, 2023
As outlined in yesterday's Weekly Plan, two significant references draw attention in the short term.
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.
Considering Friday's relatively uneventful shortened session, which unfolded within Wednesday's value area, I've merged the profiles of both days on the chart. As outlined in yesterday's Weekly Plan, two significant references draw attention in the short term. The initial reference of interest centers around Wednesday's excess high, given that excess marks the end of one auction and the beginning of another. The second reference is the fifth unfilled gap since the low established October 27th, located at 4554.75.
Buyers aim to promptly take out and negate the excess, targeting an upside continuation towards 4591/4604. Conversely, sellers aim to fill the gap and establish acceptance below it, targeting fills of structure towards the highlighted high volume node (HVN). Speaking of structure, the market has established 10 NVPOCs, and as previously noted, there are five unfilled daily gaps since the low established on October 27th, pointing to a notably weak structure that may benefit from some necessary cleanup. Keep in mind that a market trending upward, showing no inclination to clean up poor structure, is not one you'd want to fight against.
For tomorrow, the Smashlevel (Pivot) is 4572, which represents the value area high (VAH) of the previous week. Break and hold above 4572 indicating a continuation of this imbalance phase, would target the unfilled daily gap at 4591, effectively negating Wednesday’s excess, as well as the final upside target of 4604, representing a weekly NVPOC. Holding below 4572 would target the unfilled daily gap at 4554.75. Break and hold below 4554.75 would target 4544, as well as the final downside target of 4530. Take note of the high volume node (HVN) within the 4530/4520 support area.
Levels of Interest
Going into tomorrow's session, I will observe 4572.
Break and hold above 4572 would target 4591 / 4604
Holding below 4572 would target 4554 / 4544 / 4530
Additionally, pay attention to the following VIX levels: 12.98 and 11.92. These levels can provide confirmation of strength or weakness.
Break and hold above 4604 with VIX below 11.92 would confirm strength.
Break and hold below 4530 with VIX above 12.98 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.