ES Daily Plan | October 22, 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
Friday’s inside day was the primary focus today, offering solid opportunities throughout the session. The intraday pivot at 5914, referred to as the Smashlevel, was tested and found resistance early in the overnight session, resulting in a full traverse of Friday’s range to test the initial downside target at 5887. Sellers attempted an inside day breakdown, but it failed to see continuation, triggering a move in the opposite direction—a classic “look below and fail” setup.
The RTH session opened within Friday’s range and value area, offering limited opportunities for traders, as these conditions can easily lead to getting chopped up. The below-average initial balance range of 11 handles added to the challenge. C-period saw a liquidation break, leading to a second attempt at an inside day breakdown. This time, sellers defended the retest of 5887, resulting in downside continuation during D-period. This move was accompanied by the VIX breaking above its resistance level at 19.10. However, the final intraday target at 5860 was not quite reached (LOD: 5865) before buyers stepped in. In the following period (E-period), the VIX returned below 19.10, and the market eventually retraced the morning liquidation, closing back within Friday’s range.
Friday’s inside day offered a couple of solid opportunities both overnight and in the RTH session; however, the overall context remains unchanged, with the market still in consolidation mode—now forming a 6-day balance area. Responsive activity is expected within this 5925-5850 range, while a stronger directional move requires acceptance beyond its extremes.
The general balance guideline suggests going with the break of the multi-day balance area and monitoring for continuation (acceptance) or lack thereof (rejection). If there is a lack of continuation following a breakout attempt, it can trigger moves in the opposite direction.
In terms of levels, the Smashlevel is at 5914. Holding below this level would target the HVN at 5887, with a final target at the support area between 5860 and 5850 under sustained selling pressure. Failure to hold below 5914 would target the overnight ATH at 5927, with a final target of 5944 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5914.
Break and hold above 5914 would target 5927 / 5944
Holding below 5914 would target 5887 / 5860 / 5850
Additionally, pay attention to the following VIX levels: 19.48 and 17.26. These levels can provide confirmation of strength or weakness.
Break and hold above 5944 with VIX below 17.26 would confirm strength.
Break and hold below 5850 with VIX above 19.48 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.
