ES Daily Plan | October 9, 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 saw an immediate test of the highlighted support area between 5734 and 5724, marking the lower end of the current multi-day balance area. Buyers stepped in to defend, leaving behind a notable excess low (ONL: 5725.25). As discussed, the 5724 level is a crucial reference that buyers need to hold in order to maintain control. A sustained breakdown below this level would shift both the daily and weekly to one-time framing down, potentially signaling a broader change in market tone. The Smashlevel at 5755 was initially defended, but during the European session, buyers managed to regain it, resulting in a quick move to the initial upside target of 5767.
In my pre-open post on X (link), I reiterated that a strong market would need to hold above 5767 (“intraday bullish above”), staying within Monday’s upper distribution, which would open the door for targets at 5785 and potentially 5798. Ultimately, the 5767 level held during the RTH session (LOD: 5763.75), resulting in a session controlled by buyers who rejected Monday’s double distribution trend day to the downside. The C-period extended the initial balance to the upside, tagging 5785 and coming within 3 handles of the final target at 5798. During this sequence, the VIX reached 21.14, with support at 21.06, making the impulsive move in the C-period tricky to chase. The upside momentum stalled for several periods, frustrating late buyers. During the H-period, a liquidation break occurred, stopping out those late buyers and providing fresh buyers with a better opportunity, which they successfully capitalized on. The closing session tagged and exceeded 5798, forming a late-day spike.
The multi-day balance low was tested and defended overnight, resulting in responsive activity and a rotation back to value, effectively rejecting yesterday’s double distribution trend day to the downside. The overall context remains unchanged, with the market still in consolidation mode—now forming a 14-day balance area. One thing is certain: the longer a consolidation phase lasts, the more significant the subsequent breakout tends to be. FOMC minutes on deck tomorrow.
In terms of levels, the Smashlevel is at 5800. Holding above this level signals strength, targeting the multi-day balance high at 5827-30. Acceptance above 5830 would then target 5848, with a final target at 5863 under sustained buying pressure. Failure to hold above 5800 would target the afternoon pullback low at 5775. Acceptance above 5775 would then target 5755, with a final target at 5734 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5800.
Break and hold above 5800 would target 5827-30 / 5848 / 5863
Holding below 5800 would target 5775 / 5755 / 5734
Additionally, pay attention to the following VIX levels: 22.94 and 19.88. These levels can provide confirmation of strength or weakness.
Break and hold above 5863 with VIX below 19.88 would confirm strength.
Break and hold below 5734 with VIX above 22.94 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.
Levels precise as always! I'm curious to see which way the balance will break!