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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.
Contextual Analysis & Plan
Sellers managed to take out 7711 (Smashlevel) early in the overnight session, triggering the anticipated weakness. As a result, the high volume node at 7690, acting as the downside magnet, was tagged rather quickly. This was a great example of auction dynamics: markets transition from balance to imbalance, but when that imbalance fails, price often rotates back toward where value was previously established—in this case, the HVN at 7690. A LBAF of 7690 triggered a revisit of 7711; however, buyers ultimately failed to gain meaningful traction above 7711, resulting in weakness heading into the RTH session.
The RTH session, which opened with a true gap down, was rather lackluster, as most of the session saw trading activity centered around the HVN at 7690. This is not uncommon when the auction returns to an area of previously established value, where two-sided trade often develops. We saw an end-of-month rip into the close, but today’s true gap at 7711.75 remained unfilled.
Session Recap
A failure to defend 7711 opened the door to a rotation back toward the HVN at 7690—a scenario that ultimately played out today following a true gap down.
With the auction now back inside the prior multi-day balance, we can expect responsive, two-sided trade as long as acceptance is not established outside the 7711–7660 range, making both levels attractive trade locations.
The main objective for buyers is to regain acceptance within Friday’s value area, effectively negating today’s gap. Failure to do so would maintain short-term downside pressure given the failed breakout.
In terms of levels, the Smashlevel is at 7690, the high volume node (HVN), which aligns with today’s FS VWAP. Holding above 7690 would target the unfilled gap at 7711 (UT1). Acceptance above 7711 would signal intraday strength, targeting 7735 (UT2), with 7755 (FUT) serving as the final upside target under sustained buying pressure.
On the flip side, failure to hold 7690 shifts focus to last week’s VAL at 7660 (DT1), with 7637 (FDT), the unfilled bull gap, serving as the final downside target under sustained selling pressure.
Visual Representation
Levels of Interest
Going into tomorrow’s session, I’ll closely observe the behavior around 7690.
Holding above 7690 would target 7711 / 7735 / 7755
Break and hold below 7690 would target 7660 / 7737
Additionally, pay attention to the following VIX levels: 15.66 and 14.18. These levels can provide confirmation of strength or weakness.
Break and hold above 7755 with VIX below 14.18 would confirm strength.
Break and hold below 7737 with VIX above 15.66 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.
Thanks Smash!!! Have a great session
Thanks Smash!