ES Daily Plan | October 24, 2024

My preparations and expectations for the upcoming session.

Oct 23, 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

The overnight session tested and found support at 5881 to the tick during the Asian session. The 5881 level was our intraday pivot, also marked with “intraday bearish if below.” When sellers managed to break the 5881 level during the European session and defended the retest, it opened the door for further weakness.

The break of 5881 during the European session.

The RTH session opened below the highlighted 7-day composite value area and failed to regain it. The initial balance (A- and B-period) tested the initial downside target at 5860, which prompted a reaction. However, buyers failed to gain momentum during the C-period, which stayed within the initial balance range. Change took place in the D-period, when sellers extended the initial balance to the downside, breaking the 7-day balance low at 5850 and effectively ending the weekly one-time framing up.

The single prints formed in the D-period failed to get filled during the subsequent E- and F-periods, signaling weakness as buyers struggled to regain traction within the multi-day balance area. The market holding below the 5850 level, which marked both the balance low and final intraday target, was a bearish development. This weakness was later confirmed by the VIX breaking above its resistance level of 19.26 in the H-period. Consequently, two additional targets were reached in the afternoon session: 5827 and 5800, before a closing reversal unfolded back to the halfback.

Today’s session saw a breakdown of the multi-day balance, effectively ending the weekly one-time framing up in the process. The key question now is whether sellers can sustain the breakdown in an attempt to target the high volume node at 5785, our weekly downside target. A strong market would need to regain the 5858 level, where change took place today, opening the door for a return to the high volume node at 5896.

In terms of levels, the Smashlevel is at 5858. Holding below this level would target the prior 2-week balance high at 5827, aligning with the Monthly VWAP. Acceptance below 5827 would then target 5811, with a final target at 5785 under sustained selling pressure. Failure to hold below 5858 would open the door for a test of the daily NVPOC at 5879, with a final target at 5896 under sustained buying pressure.

Levels of Interest

Going into tomorrow's session, I will closely observe the behavior around 5858.

Break and hold above 5858 would target 5879 / 5896
Holding below 5858 would target 5827 / 5811 / 5785

Additionally, pay attention to the following VIX levels: 20.34 and 18.14. These levels can provide confirmation of strength or weakness.

Break and hold above 5896 with VIX below 18.14 would confirm strength.
Break and hold below 5785 with VIX above 20.34 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.