ES Daily Plan | November 28, 2023
Currently, the market is in a short-term state of balance, coiling for a directional move while awaiting additional market-generated information.
Visual Representation
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.
Contextual Analysis
This week, as previously discussed, we are focusing on two significant references. 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.
Today's session was rather uneventful, with no testing of either reference, as it stayed confined within a narrow 14.50-handle range. That being said, the short-term plan remains unchanged after today's session. Currently, the market is in a short-term state of balance, coiling for a directional move while awaiting additional market-generated information. Both the short-term value (5D VPOC) and the medium-term value (20D VPOC) are situated within this 3-day balance area (4565), confirming the balance. I have merged the last three sessions on the chart.
When the market lacks a clear directional conviction, it’s crucial to not overstay your welcome in any trade.
Note from the previous daily plan that remains active:
“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 the weekly 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: 13.24 and 12.14. These levels can provide confirmation of strength or weakness.
Break and hold above 4604 with VIX below 12.14 would confirm strength.
Break and hold below 4530 with VIX above 13.24 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.
Weekly Plan
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.
Thank you 🌼
Thank you, buddy! Another great day for scalping/longs and shorts!