ES Daily Plan | October 18, 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
Early weakness in the overnight session found support just a few handles above the important 5868 level (ONL: 5871.25), which served as the launch point for a notable move to the upside. After tagging the initial target at 5912, upside momentum briefly stalled, only to resume with another leg higher following the release of data. The final target for the session was 5930, with the overnight session reaching a high of 5927.25.
Due to the strong overnight move, the RTH session opened with a sizable true gap to the upside. Opening near the final target of 5930 (Open: 5923) made it less favorable to be a buyer, unless the open demonstrated strength by breaking and holding above the overnight high and the 5930 level. However, this scenario didn’t unfold, as selling pressure emerged immediately, leading to the gap being filled by the B-period. As discussed in the previous plan, the 5891 level was key, and it played a pivotal role in today's session, acting as solid support and providing a couple of great bounces. However, buyers were unable to regain the 5912 level, where the overnight session had briefly balanced. Sellers managed to close the session at its lows, below the 5891 level.
Today's attempt by buyers to break out of balance following the gap higher was decisively rejected near the final upside target at 5930, leading to a return to Wednesday's upper distribution. The overnight ATH at 5927.25, which went untested during the RTH session, remains a reference level to carry forward. A close in the middle of the balance, with OPEX tomorrow, sets the stage for shenanigans.
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 target 5913, 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 5913 / 5930
Holding below 5891 would target 5868 / 5846
Additionally, pay attention to the following VIX levels: 20.42 and 17.78. These levels can provide confirmation of strength or weakness.
Break and hold above 5930 with VIX below 17.78 would confirm strength.
Break and hold below 5846 with VIX above 20.42 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 to SMASH! I once saw him mention that he was using Range 16 (I hope I remembered that correctly, but I can’t recall where I saw it). At the time, I didn’t really understand what it was. Even after switching from TradingView to MotiveWave, I continued to use the 5-minute chart to observe the market.
Later, I came across a discussion on the MotiveWave forum where someone said that using Range Bars can clarify many confusing aspects of market behavior. This made me think back to SMASH’s mention of Range 16. Since he uses it and others on the forum highlighted its benefits, I became curious. If SMASH, who provides us with key levels every day, finds it useful, there must be good reasons for it. So, I decided to start using Range 16 to analyze the market.
Thank you, SMASH, for sharing your insights about Range 16 and for consistently providing key levels. Your guidance is invaluable to novices like me, offering a solid reference point for making decisions.
Precise smash have said about shenanigans cuz SPX closed right at intraweek mid to the tick.