ES Daily Plan | November 7, 2024
My preparations and expectations for the upcoming session.
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
Strength was already observed in yesterday's after-hours session, as buyers pushed outside the 4-day balance area. The key question was whether this move would be sustained—an indicator of a strong market—and the answer was a resounding yes. The market responded positively to the unfolding election results, reaching the final upside target of 5870 early in the Asian session. A distribution was established above 5870, leading to an upside continuation that printed a new all-time high (ATH) during the European session. The VIX was experiencing a significant crush.
The RTH session opened with a substantial true gap up, which can be quite difficult to navigate, especially early on, as the market typically focuses on processing the overnight move. The immediate support was the prior ATH at 5925, as highlighted in the pre-open post on X. Failure to hold this level would open the door for structural fills down to the breakout single prints around 5900, just above the Asia distribution, as discussed. The market saw an immediate inventory correction, initially holding 5925 before taking another leg down to test the 5900 area (LOD: 5900.75). The 5900 level is the Weekly Extreme High, our final weekly target, which was defended. The Weekly Extreme Low for VIX is at 17.45, meaning the break above 5900 is confirmed with VIX closing at 16.27. This is just a data point to carry forward in your narrative. There’s no point in fighting today’s move unless we start gaining traction below 5900, which would immediately end the daily one-time framing up and raise questions about the underlying strength of today’s new all-time high. The morning session was marked by two-sided activity, highlighting how tricky it can be to navigate large gaps. Change took place in the H-period, eventually leading to a cleanup of the overnight ATH and the establishment of a new RTH ATH at 5967.
Significant session in terms of volatility today, as the market exploded to the upside and printed a new ATH at 5967, effectively cleaning up the unfinished business at 5927 (the prior ON ATH) in the process. A double distribution was established, with a set of single prints in the H-period, dividing the distributions. A strong market holds within the upper distribution, while a less bullish response would involve a return to the lower distribution. A weak market would immediately end the daily OTFU. FOMC on deck tomorrow.
In terms of levels, the Smashlevel is at 5946, marking the lower end of today’s upper distribution. Holding above this level signals strength, targeting an upside continuation toward 5980, with a final target at 6000 under sustained buying pressure. Failure to hold above 5946 would target the prior RTH ATH at 5925, with a final target at 5900 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5946.
Holding above 5946 would target 5980 / 6000
Break and hold below 5946 would target 5925 / 5900
Additionally, pay attention to the following VIX levels: 17.40 and 15.14. These levels can provide confirmation of strength or weakness.
Break and hold above 6000 with VIX below 15.14 would confirm strength.
Break and hold below 5900 with VIX above 17.40 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
Make sure to review the Weekly Plan, which provides a broader perspective and highlights key levels of interest to observe in the upcoming week.
Observe the confluence in the VIX, with the Weekly Extreme Low at 17.45 and tomorrow's resistance at 17.40, making it a crucial area. Additionally, the Weekly Extreme High for the NQ is at 20,916, a level to monitor in the short term.
6001 with a vix at 15.13 🤩