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The yellow levels highlighted at the bottom left of the chart are the primary intraday levels I focus on. To avoid impulsive decisions at poor trade locations, I follow a simple but effective rule: exercise caution when initiating trades outside of these yellow levels.

This means I’m cautious about chasing longs above the Final Upside Target (FUT) and shorts below the Final Downside Target (FDT). It’s important to understand that not chasing does not imply initiating a trade in the opposite direction. Discipline over impulse.

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Be sure to review the Weekly Plan for a broader perspective, key levels, and market expectations for the week ahead.

Catalysts

Contextual Analysis & Plan

Quick update: Despite the lack of directional movement, great trading opportunities emerged around our key levels of interest. Buyers reclaimed 7866 (Smashlevel) immediately overnight, triggering a traverse of Tuesday’s value area toward 7887 (UT1), where sellers stepped in to the tick. The overnight strength was retraced ahead of the RTH session, with the auction returning to 7866.

Failure to reclaim 7866 early in RTH put sellers in control during the Initial Balance. However, the downside move stalled in the 7855s, where passive buyers absorbed aggressive selling. This resulted in a poor low forming across the B and C periods. With sellers failing to make further progress, they were quickly put under pressure as aggressive buyers stepped in during the D and E periods, triggering a solid bounce.

The Smashlevel at 7866 was then revisited, producing a strong rejection in confluence with the FS VWAP (see Figure 1). Aggressive buyers were absorbed before sellers stepped back in. The poor low was cleaned up during the afternoon session, with the auction testing 7848 (DT1), where a closing bounce unfolded. The short-term value (5D VPOC) shifted higher from 7824 to 7855.

Figure 1 - Liquidity Heatmap & Footprint

Session Recap

The context remains unchanged following today’s rather uneventful inside day. The auction remained contained between our two key levels: 7866, last week’s VAH, and 7848, the prior ATH and multi-week balance high. Both remain key references to monitor in the short term.

Reclaiming 7866 would be a short-term bullish development, opening the door to a traverse of Tuesday’s value area. Failure to defend 7848 would open the door to a rotation lower toward last week’s VAL at 7807, which closely aligns with the Monthly VWAP.

In terms of levels, the Smashlevel is at 7866, last week’s VAH, which aligns with the prior SPX ATH (7816.17). Holding below 7866 would target the prior ATH at 7848 (DT1), where a potential LBAF is of interest. Acceptance below 7848 would signal intraday weakness, targeting 7830 (DT1), with 7807 (FDT), last week’s VAL, serving as the final downside target under sustained selling pressure.

On the flip side, reclaiming and holding above 7866 would shift focus to Tuesday’s IB high at 7887 (UT1), where a potential LAAF is of interest, with 7915 (FUT) serving as the final upside target under sustained buying pressure.

Visual Representation

Levels of Interest

Going into tomorrow’s session, I’ll closely observe the behavior around 7866.

Break and hold above 7866 would target 7887 / 7915
Holding below 7866 would target 7848 / 7830 / 7807

Additionally, pay attention to the following VIX levels: 15.98 and 14.44. These levels can provide confirmation of strength or weakness.

Break and hold above 7915 with VIX below 14.44 would confirm strength.
Break and hold below 7807 with VIX above 15.98 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.

Smashelito’s ES/SPX Newsletter

ES Daily Plan | October 13, 2026