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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
The overnight session was characterized by weakness after failing to defend the Smashlevel at 7848, leading to a rotation lower toward the next level of interest at 7811 (DT1), where a change took place on Monday’s session. A beautiful Look Below and Fail (LBAF) setup played out at 7811, triggering a solid reversal. As one follower pointed out, the safer approach was to wait for a reclaim of Wednesday’s low at 7815 before joining the reversal. This sequence also aligned well with VIX dropping below its resistance level at 15.76.
The RTH session opened within Wednesday’s lower distribution and rotated higher toward the key 7848 level. Sellers stepped in aggressively a couple of handles below 7848 during the C-period, quickly erasing the opening gains. The downside momentum slowed significantly during the D and E-periods before a headline-driven bounce triggered an upside spike in the F-period (see Figure 1). The move was sold right at 7848 (Smashlevel), which ultimately marked the RTH high, triggering a notable increase in downside pressure.
As a result, the final downside target at 7791 (FDT) was tagged during the H-period, completing the cleanup of Monday’s poor structure. As I’ve reiterated many times, chasing new short positions near FDT levels is always tricky, and today’s afternoon session provided a good example of why.
Session Recap
After immediately negating Tuesday’s true gap higher, during which a new ATH was printed, the auction has shifted into a short-term downtrend, developing value lower.
The key question now, after cleaning up Monday’s poor structure, is whether stronger buyers will step in or if the Look Above the ATH and Fail will lead to further downside pressure.
The extremes of today’s profiles are important, with the upper extreme marked by 7848, a key level buyers need to reclaim, while the lower extreme represents last week’s VAH, a key reference where sellers aim to build acceptance below.
In terms of levels, the Smashlevel is at 7822, today’s IB low, which closely aligns with an LVN at 7820. Holding below 7822 would maintain downside pressure, targeting 7802 (DT1), where a potential LBAF is of interest. Acceptance below 7802 would signal further intraday weakness, targeting 7783 (DT1), with 7764 (FDT) serving as the final downside target under sustained selling pressure.
On the flip side, reclaiming and holding above 7822 would shift focus to the prior ATH at 7848 (UT1), where a potential LAAF is of interest. Acceptance above 7848 would signal intraday strength, targeting 7866 (UT2), with 7887 (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 7822.
Break and hold above 7822 would target 7848 / 7866 / 7887
Holding below 7822 would target 7802 / 7783 / 7764
Additionally, pay attention to the following VIX levels: 16.12 and 14.72. These levels can provide confirmation of strength or weakness.
Break and hold above 7887 with VIX below 14.72 would confirm strength.
Break and hold below 7764 with VIX above 16.12 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.
The 'truth' post triggered some short covering, which was immediately sold. Hideous environment with weak buyers and weak sellers. Notable was how NVDA was sold relentlessly on the headline, and triggered weakness on ES and NQ
Thanks smash