ES Daily Plan | November 9, 2023

Consolidation at higher prices is bullish in context of the recent directional move to the upside. The key question is whether the market has to break before it can rally.

Visual Representation

ES Daily Plan | November 9, 2023

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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.

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Contextual Analysis

The struggle for sellers to gain downside traction continues. Despite the market forming a triple distribution to the downside at one point, it failed to break the pattern of higher lows on the daily, resulting in a solid reversal. The market remains challenging for traders who overstay their welcome in either direction.

I have merged the profiles from the last four days on the chart, highlighting the current distribution of interest. Contextually, there's been little change. Buyers are aiming to end the monthly one-time framing down by breaching the October high at 4423.25, while sellers aim to break the pattern of higher lows on the daily in order to potentially trigger some weakness.

Consolidation at higher prices is bullish in context of the recent directional move to the upside. The key question is whether the market has to break before it can rally. The daily has now stacked four lows closely together. The LVN at 4389 is of short-term interest, coinciding with the Weekly VWAP.

Note from yesterday's plan, still applicable:

“The current conditions area quite tricky at the moment, with sellers struggling to gain any meaningful downside traction while the daily one-time framing up remains intact. At the same time, the market is trading at the upper end of the weekly balance area, making it an unfavorable location to initiative new long positions. Exercise caution not to overstay your welcome in any trades, as the market awaits further market-generated information.”

For tomorrow, the Smashlevel (Pivot) is 4389, which represents the low volume node (LVN) within the 4D composite. Holding above 4389 would target 4402. Break and hold above 4402 would target 4418 and 4423, which represents the Monthly Extreme high and October high. In the case of continued strength, the final upside targets is located at 4435. Break and hold below 4389 would target the support area from 4375 to the final downside target of 4365, effectively ending the daily OTFU.

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Levels of Interest

Going into tomorrow's session, I will observe 4389.

• Holding above 4389 would target 4402 / 4418 / 4423 / 4435

• Break and hold below 4389 would target 4375 / 4365

Additionally, pay attention to the following VIX levels: 15.10 and 13.80. These levels can provide confirmation of strength or weakness.

• Break and hold above 4435 with VIX below 13.80 would confirm strength.

• Break and hold below 4365 with VIX above 15.10 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.

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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.

ES Weekly Plan | November 6-10, 2023

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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.