ES Daily Plan | October 23, 2024

My preparations and expectations for the upcoming session.

Oct 22, 2024

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

Price can have three relationships to value: it can be above, below, or within it. "Responsive" behavior aligns with expectations, while "Initiating" behavior deviates from expectations.

• Buying below value is expected and thus considered responsive activity.
• Buying above value is unexpected and thus considered initiating activity.
• Selling above value is expected and thus considered responsive activity.
• Selling below value is unexpected and thus considered initiating activity.

For a more comprehensive understanding of these principles within the framework of Auction Market Theory (AMT), consider exploring 'CBOT - A Six-Part Study Guide to Market Profile'.

The context remains unchanged, with the market continuing to demonstrate responsive two-sided activity within the multi-day balance area. Overnight weakness, which came within 10 handles of the balance low, was reversed in the RTH session, as the market continues to punish traders who overstay their welcome.

VIX resistance outlined in the previous plan 19.48 (HOD: 19.44)

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 5881. Holding above this level would target the resistance area between 5904 and 5914, with a final target at 5927 under sustained buying pressure. Failure to hold above 5881 would open the door for a test of the support area between 5860 and 5850.

Levels of Interest

Going into tomorrow's session, I will closely observe the behavior around 5881.

Holding above 5881 would target 5904 / 5914 / 5927
Break and hold below 5881 would target 5860 / 5850

Additionally, pay attention to the following VIX levels: 19.26 and 17.14. These levels can provide confirmation of strength or weakness.

Break and hold above 5927 with VIX below 17.14 would confirm strength.
Break and hold below 5850 with VIX above 19.26 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.