ES Daily Plan | October 31, 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
Last week, sellers ended the weekly one-time framing up by breaking the prior week’s low of 5850, signaling the end of the imbalance phase to the upside and a return to balance on the weekly timeframe. This week has illustrated how the market behaves in balanced conditions, with responsive two-sided activity.
Overnight, buyers attempted to break and hold above the crucial 5883 level, our intraday pivot; however, the attempt failed, and the market returned below 5883. The next attempt during the European session, which lasted several hours, was absorbed by sellers who managed to push prices lower, eventually tagging the 5860 level. The 5883-5860 range is the mini-distribution to monitor within this larger weekly balance, as previously discussed.
The RTH session saw early weakness that sliced through the 5860-5850 support but quickly found responsive buyers, similar to Tuesday’s session. Once back above 5860, it was a quick trip to the 5883 level, which was once again met by selling activity. Buyers attempted to extend the initial balance during the E-period, but this effort was ultimately not sustained, leading to a move back down to the 5860 level in the afternoon session. I’ve merged this week’s sessions on the chart, highlighting the mini-distribution between 5883 and 5860 once again.
Last week, the market returned to balance on the weekly timeframe, and this week has been all about responsive two-sided activity, primarily between the key levels of 5883 and 5860. Sellers managed to close the session below 5860, accompanied by after-hours weakness, which we will monitor for continuation or lack thereof. PCE data on deck tomorrow pre-open.
In terms of levels, the Smashlevel is at 5860, marking this week’s value support. Holding below this level would target the prior 2-week balance high at 5827, with a final target at 5801 under sustained selling pressure. Failure to hold below 5860 would target a value traverse toward 5883, with a final target at 5900 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5860.
Break and hold above 5860 would target 5883 / 5900
Holding below 5860 would target 5827 / 5801
Additionally, pay attention to the following VIX levels: 21.66 and 19.02. These levels can provide confirmation of strength or weakness.
Break and hold above 5900 with VIX below 19.02 would confirm strength.
Break and hold below 5801 with VIX above 21.66 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.
Aggressive selling at globex open 😏