ES Daily Plan | November 7, 2023
Today’s session resulted in an inside day, characterized by its price range being contained within the previous day’s range.
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
In light of the uneventful nature of today's session and the unchanged context, there's no need for an extensive analysis. Trading took place within a very tight range during the overnight (ON) session, showing no interest in filling any of the structural deficiencies from last week, which suggests bullish implications. The main objective for buyers was to spend time and volume at these higher prices, and they successfully achieved this with the short-term value (5D VPOC) shifting from 4190 to 4381. The most interesting part of the RTH session was the liquidation break in the H-period, which occurred after buyers struggled to gain traction above the prior Smashlevel of 4383. During this period of weakness, the VIX tested its resistance level of 15.60 (HOD: 15.58). VIX levels can serve as valuable exit indicators. For instance, if you were in a short position, testing the VIX resistance level could be a signal to lock in partial profits. If the VIX resistance were to be breached, the final downside target could act as a magnet. Always confirm with order flow when levels of interest align.
Today’s session resulted in an inside day, characterized by its price range being contained within the previous day’s range. While the daily technically maintains its one-time framing up, the market is currently taking a breather following last week’s rally. The general guideline suggests going with the break of the inside day and observing for continuation (Acceptance) or lack thereof (Rejection). If there's a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction.
Buyers aim to break the inside day to the upside, with the primary upside target being the weekly balance high and October high at 4423.25. A break would end the monthly one-time framing down. The consolidation at these higher prices does not represent a strong response from the sellers, especially given the significant structural deficiencies from the previous week. Sellers' main objective is to break the pattern of higher lows on the daily, targeting a clean up of the gap area #3.
For tomorrow, the Smashlevel (Pivot) is 4386, which represents the immediate resistance. Break and hold above 4386 would target the resistance area from 4400 to 4410, where the medium-term value (20D VPOC) is located. In the case of continued strength, the final upside targets are located at 4418 and 4423, which represents the Monthly Extreme high and October high. Holding below 4386 would target the lower end of today’s range at 4365. Break and hold below 4365 would target the support area from 4347 to the unfilled daily gap at 4337.25, effectively ending the daily one-time framing up.
Levels of Interest
Going into tomorrow's session, I will observe 4386.
Break and hold above 4386 would target 4400 / 4410 / 4418 / 4423
Holding below 4386 would target 4365 / 4347 / 4337
Additionally, pay attention to the following VIX levels: 15.58 and 14.20. These levels can provide confirmation of strength or weakness.
Break and hold above 4423 with VIX below 14.20 would confirm strength.
Break and hold below 4337 with VIX above 15.58 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.
4383 was a great level today!
Thanks, sir! Do you analyse $NQ too?