ES Daily Plan | October 1, 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
The overnight session offered a great long setup right away, following a look below and fail of the Smashlevel at 5782, which triggered a 20-handle reversal.
After defending the 5782 level for most of the overnight session, sellers finally managed to break it two hours before the RTH session opened, leading to a small true gap down at the open. Opening below Friday’s low signaled the end of the daily one-time framing up. For traders monitoring order flow, the pre-open break of 5782 saw heavy aggressive selling, which suggested that a lack of immediate downside continuation in the RTH session would put those sellers in a tricky situation.
The RTH session saw an immediate 10-handle squeeze, followed by a pullback toward the trapped sellers, where buying activity emerged to defend the 5782 level. Overall, the price action was quite choppy during the morning session, as sellers struggled to gain downside traction, while buyers lacked momentum following the failure of the inside day breakdown. In the afternoon session, a liquidation break occurred in the J-period, tagging the initial downside target of 5763 and completing a traverse of the composite value area. The liquidation break was a downside risk we discussed in the Weekly Plan, serving to shake out weak longs and provide an opportunity for stronger buyers to enter. Buyers were quick to capitalize on this dip, and the session saw closing strength, forming an upward spike as the M-period made a new intraday high.
Unlike the relatively quiet morning session, the afternoon session saw a notable liquidation break in the J-period, tagging the 5763 level—a drop that buyers were quick to pick up. The closing session formed an upward spike, which is of short-term interest. The strongest response would be to accept this closing strength and target an upside continuation, while sellers aim to reject it by establishing acceptance below the spike base of 5799.
In terms of levels, the Smashlevel is at 5799, marking the spike base. Holding above this level signals strength, targeting the resistance area between 5830 and 5840, with a final target at 5863 under sustained buying pressure. Failure to hold above 5799 would target 5789, with a final target at 5763 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5799.
Holding above 5799 would target 5830 / 5840 / 5863
Break and hold below 5799 would target 5789 / 5763
Additionally, pay attention to the following VIX levels: 17.74 and 15.72. These levels can provide confirmation of strength or weakness.
Break and hold above 5863 with VIX below 15.72 would confirm strength.
Break and hold below 5763 with VIX above 17.74 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.
lol sellers below 40 are having such a difficult time
Thanks to Smashelito for pointing out the important price levels we should watch. As he often says, "Not chasing a trade doesn't mean you should automatically trade in the opposite direction."
I’m not sure if my thinking is flawed, but when I noticed that the 5740 level didn’t follow through well, and the footprint chart’s delta suggested that aggressive bears trying to short were trapped, it seemed like a solid long setup.
P.S.: I recorded the video in Cantonese and used AI to translate it into English. Please note that the visuals and audio might not be perfectly synced. Thank you for your understanding!
video link:
https://x.com/williamwong47/status/1841157535216386172?s=46