ES Daily Plan | October 30, 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 explored prices below Monday’s inside day during Asian hours, finding support at 5850 before moving back within Monday’s range. During the European session, sellers once again pushed prices lower, leading to the RTH session opening on a true gap down. A true gap occurs when the RTH session opens entirely outside the prior day's range—either above the high or, as in today’s case, below the low.
The RTH session saw immediate selling pressure, breaching the overnight low, which is typically the most bearish outcome when gapping lower. The first bounce came from Friday’s excess low, making the conditions fairly straightforward from that point: for sellers to achieve continued downside, the overnight low and opening levels needed to be defended—two crucial references when gapping lower. Failure to do so opened the door to filling the gap, which served as sellers' last line of defense.
Buyers managed to fill the gap in the B-period, after which the market consolidated at the previous day’s low for 20 minutes before an impulsive move higher unfolded. Gaining traction within the previous day’s range is the most bullish outcome following a true gap lower, as it indicates a rejection of sellers' attempt to change the market tone relative to the previous session. For the remainder of the session, buyers actively defended the 5860 level, creating trade opportunities, and eventually reached the next level of interest at 5883, which capped the upside. The 20D VPOC (medium-term value) has shifted higher from 5760 to 5870. The market is coiling for a directional move.
Sellers attempted to change the tone relative to Monday’s session with a gap lower but failed after finding responsive buyers who managed to push prices back within Monday’s range. However, Friday's afternoon sellers continue to cap the upside. The 5883-5860 range is the mini-distribution to monitor within this larger weekly balance.
In terms of levels, the Smashlevel is at 5883, marking Friday’s afternoon rally high. Holding below this level would target support area between 5860 and 5850, with a final target at 5827 under sustained selling pressure. Failure to hold below 5883 would target 5900, with a final target at 5914 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5883.
Break and hold above 5883 would target 5900 / 5914
Holding below 5883 would target 5860 / 5850 / 5827
Additionally, pay attention to the following VIX levels: 20.64 and 18.02. These levels can provide confirmation of strength or weakness.
Break and hold above 5914 with VIX below 18.02 would confirm strength.
Break and hold below 5827 with VIX above 20.64 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!
Thanks Smash.