ES Daily Plan | October 3, 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 overnight session was relatively uneventful, remaining within Tuesday’s value area. Sellers made several attempts to break below the 5740 level, but buyers held firm, preventing the downside continuation sellers were aiming for. Given that 5740 marks the lower end of the multi-day balance area, this defense by buyers was not unexpected.
In contrast, the RTH session was notably more dynamic, particularly during the initial balance (A & B periods), offering some excellent trading opportunities. The A-period opened with a sharp sell-off, breaking below the 5740 level and quickly targeting the final intraday downside at 5721. However, the breakdown of this balance, which shifted the daily to one-time framing down, was short-lived and ultimately resulted in a look below and fail. What made this failed breakdown particularly interesting was that it came within 3 handles of the final downside target at 5721 (LOD: 5724), with the VIX simultaneously testing its resistance level of 20.40 (HOD: 20.36). Once 5740 was regained, a brief consolidation period was followed by aggressive buying, pushing the market up to test the Smashlevel at 5772. The 5772 level effectively capped the upside momentum almost to the tick (E-period high: 5772.25), leading to a pullback that buyers picked up near the opening level. The session closed within Tuesday’s value area.
Today’s session looked below the multi-day balance area, coming within 3 handles of the final 5721 target, and failed, resulting in a solid counter-move. The upside momentum was capped by the intraday pivot at 5772, which remains the key level for buyers to regain in order to target fills of Tuesday’s A-period excess. Trouble would start to kick in if the market drops below 5740 again.
In terms of levels, they remain unchanged, with the Smashlevel at 5772. Holding below this level signals weakness, targeting the 5740, with a final target at 5721 under sustained selling pressure. Failure to hold below 5772 would target the resistance area between 5799 and 5809, effectively completing today’s imbalanced profile to the upside and filling Tuesday’s A-period excess in the process.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5772.
Break and hold above 5772 would target 5799 / 5809
Holding below 5772 would target 5740 / 5721
Additionally, pay attention to the following VIX levels: 20.22 and 17.58. These levels can provide confirmation of strength or weakness.
Break and hold above 5809 with VIX below 17.58 would confirm strength.
Break and hold below 5721 with VIX above 20.22 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.
Thank you, Smashelito, for providing the key price level of 5772.
From the chart, we observe the following:
- The green areas of the five candlesticks on the 25th, 26th, 27th, 28th, and 29th are roughly equal in length, with 68% of trading volume occurring in these areas.
- This raises the question of whether bears are accumulating short positions.
- The delta for the candle on the 29th is -1231, indicating a potential downward push (with a maximum delta of -1719).
The candle on the 30th is particularly critical:
- It is bullish with a delta of -600.
- Both the green area and Point of Control (POC) are at lower levels.
- The 29th candle started the downward force, while the 30th aims to extend this momentum. However, it appears that the bears who initiated the drop on the 30th have been trapped.
If the bears do not give up, when the price rebounds to the green areas from the 25th to the 29th, we could see it turn back down. If the price breaks below and closes lower than the 30th, it would reverse the upward trend that followed the market's opening.
In summary, the price is reacting at the key level indicated by Smashelito. The accumulation of short positions from the 25th to the 29th clearly initiated downward pressure, and we need to closely monitor their actions.
image link:
https://x.com/williamwong47/status/1841668427683135530
Thanks Smash! You're the man!