ES Daily Plan | October 17, 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 main focus today was last week's high at 5868, which sellers successfully defended during the overnight session, offering multiple short-side trade opportunities. Notably, the pre-open rejection of 5868 stood out, as despite increased aggressive buying, there was no follow-through, leading to a reversal that initially saw continued downside in the RTH session.
The immediate downside pressure in the RTH session pushed the market to tag the overnight low, where momentum significantly stalled, and notable order flow activity was observed. I will provide a visual of this sequence, highlighting how aggressive sellers were absorbed by passive buyers, ultimately leading to a reversal worth 20 handles. During the initial three periods, sellers' attempts to push lower failed, as did buyers' attempts to move above 5868, resulting in a tricky environment. When buyers extended the initial balance to the upside in the G-period, they gained momentum, ultimately tagging the initial upside target at 5891. Regaining this level would provide bullish intraday confirmation; however, 5891 held firm. Today, two out of Monday’s four sets of single prints were filled, and the key question now is whether the remaining two sets will be targeted next or if Monday’s aggressive sellers will defend their positions. Take note of the highlighted aggressive selling from Monday’s session on the chart.
Today’s immediate downside pressure from the open was absorbed by passive buyers, ultimately resulting in a session that partially cleaned up Monday’s poor structure, with sellers unable to gain the needed traction within the prior week’s range. Continue the cleanup or make another trip down to 5868; 5891 will decide. Retail Sales and Jobless Claims on deck tomorrow.
In terms of levels, the Smashlevel is at 5891. Holding below this level would target the prior week’s high at 5868, with a final target of 5846 under sustained selling pressure. Failure to hold below 5891 would open the door for a cleanup of Monday’s structure, targeting 5912, with a final target of 5930 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5891.
Break and hold above 5891 would target 5912 / 5930
Holding below 5891 would target 5868 / 5846
Additionally, pay attention to the following VIX levels: 20.84 and 18.28. These levels can provide confirmation of strength or weakness.
Break and hold above 5930 with VIX below 18.28 would confirm strength.
Break and hold below 5846 with VIX above 20.84 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.
Great stuff!