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The yellow levels highlighted at the bottom left of the chart are the primary intraday levels I focus on. To avoid impulsive decisions at poor trade locations, I follow a simple but effective rule: exercise caution when initiating trades outside of these yellow levels.
This means I’m cautious about chasing longs above the Final Upside Target (FUT) and shorts below the Final Downside Target (FDT). It’s important to understand that not chasing does not imply initiating a trade in the opposite direction. Discipline over impulse.
Be sure to review the Weekly Plan for a broader perspective, key levels, and market expectations for the week ahead.
Catalysts
Contextual Analysis & Plan
Buyers attempted to reclaim 7783 (UT1) early overnight, which immediately got me long. The 7783 level was Friday’s afternoon rally high, aligning with last week’s VAH and serving as an important reference covered in the Weekly Plan. While 7783 was initially defended, the upside pace ultimately lacked follow-through, so I ended up scratching the trade. The failure to hold 7783 resulted in a rotation lower toward the Smashlevel at 7764, which ultimately proved to be a massive level that capped today’s downside.
Buyers quickly reclaimed 7783 after the RTH open and began building value above it. Notable buying on the tape was also observed pre-open. For me, acceptance is determined by how the auction behaves around a level of interest rather than by any specific timeframe. Traders found agreement above 7783, while a move back below was quickly rejected, creating an excellent trap (see Figure 1). This ended up being a great continuation setup that cleared all upside targets, ultimately reaching 7838 (FUT) and coming just a couple of ticks shy of the ATH at 7848, where traders booked profits and a closing liquidation break unfolded.
Session Recap
Finding acceptance above last week’s VAH at 7783 opened the door to a revisit of 7848, a scenario that ultimately played out today following a trend day.
Looking at the composite volume profile, we can see the auction establishing a directional move away from value, defined by the HVN around 7775. The key now is to monitor whether this move attracts continued participation.
A strong continuation higher would require a reclaim of 7838, while 7811 and 7791 are both levels of interest to monitor on pullbacks. Failure to attract continued participation would shift focus back toward the HVN at 7775.
In terms of levels, the Smashlevel is at 7838, the August high. Holding below 7838 would target today’s IB high 7811 (DT1), where a potential LBAF is of interest. Acceptance below 7811 would signal intraday weakness, targeting 7791 (DT2), with 7764 (FDT) serving as the final downside target under sustained selling pressure.
On the flip side, reclaiming and holding above 7838 shifts focus to 7855 (UT1), where a potential LAAF is of interest. Acceptance above 7855 would signal intraday strength, targeting the 200% IB extension at 7876 (UT2), with 7895 (FUT) serving as the final upside target under sustained buying pressure.
Visual Representation
Levels of Interest
Going into tomorrow’s session, I’ll closely observe the behavior around 7838.
Break and hold above 7838 would target 7855 / 7876 / 7895
Holding below 7838 would target 7811 / 7791 / 7764
Additionally, pay attention to the following VIX levels: 16.26 and 14.78. These levels can provide confirmation of strength or weakness.
Break and hold above 7895 with VIX below 14.78 would confirm strength.
Break and hold below 7764 with VIX above 16.26 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.
Thank you as always! 🙏
Thanks Smash! ;)