ES Daily Plan | October 15, 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 saw an early pullback, with buyers stepping in at Friday’s value support, just a few handles above the afternoon pullback low and the halfback level at 5846. As long as the market remained within Friday’s highlighted upper distribution, the breakout buyers from Thursday’s inside day stayed out of trouble. Later in the session, a new all-time high was printed, leading to the RTH session opening with a true gap up, cleaning up Friday’s poor high in the process.
The RTH session kicked off with aggressive buying activity right from the start, quickly driving prices above the overnight high—the most bullish outcome when gapping higher. The initial balance (A and B-period) was, similar to Friday's, characterized by strong conviction from buyers. However, upside momentum stalled from the C to the E period, leading to pullbacks that buyers were quick to capitalize on. The final upside target was outlined at 5910, tagged in the K-period, completing the intraday upside sequence. The closing session formed an upward spike; however, the marked came back and closed below 5910.
Price exploration to the upside continues following last week's breakout from the multi-day balance area, illustrating the principle that extended periods of consolidation typically result in more significant breakouts. We are nearing the 100% range extension at 5930. A change in tone seems unlikely unless today's gap is filled and acceptance is established within the previous week's range.
In terms of levels, the Smashlevel is at 5912, marking the spike base. Holding below this level would target the halfback at 5896. Acceptance below 5896 would then open the for a test of the support area between 5878 and 5868, effectively filling the gap in the process. Failure to hold below 5912 would signal continued strength, targeting the 100% range extension at 5930, with a final target of 5950/5960 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5912.
Break and hold above 5912 would target 5930 / 5950 / 5960
Holding below 5912 would target 5896 / 5878 / 5868
Additionally, pay attention to the following VIX levels: 21.06 and 18.30. These levels can provide confirmation of strength or weakness.
Break and hold above 5960 with VIX below 18.30 would confirm strength.
Break and hold below 5868 with VIX above 21.06 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.
Thanks for the write up Smash
Great, thanks!