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ES Daily Plan | September 13, 2023
Responsive activity was the theme today. The CPI data is scheduled for release tomorrow, and as usual, it is expected to bring volatility - stay nimble.
Just a reminder that I have transitioned to the ESZ23 (December) contract. Please note that I do not back-adjust my charts. I suggest marking 4461.75 (ESU23 Settlement) on your chart, as roll gaps often tend to get filled. Whether you choose to back-adjust or not, the crucial point is that tomorrow's intraday targets remain the same.
The overnight session was pretty much a non-event, as trading was confined within the range of the previous session. Sellers managed to regain control of the Smashlevel of 4535, leading to a traverse of yesterday’s range. This effectively cleaned up the unfinished business at the initial balance low we that we had carried forward.
During the RTH session, there was an initial squeeze of late sellers from the overnight session. However, the absence of fresh buying interest following the inventory correction led to some weakness. Did you notice how price was rejected during the A-period near yesterday's low volume node (LVN), which held significance as our short-term key area? The market was one-time framing down intraday, leading to a range extension to the downside. The downward pressure from the sellers could not be sustained, and this outcome was not particularly surprising, considering that traders are waiting for tomorrow's data release. Buyers briefly explore prices above the 4535 level in the PM session, only to form a poor high leading to a counter-move to stop them out, printing new daily lows. The VIX resistance level provided in the previous plan, was 14.44. Today’s HOD was 14.42.
The market remains in a state of balance in a broader perspective, awaiting additional market-generated information. The CPI data is scheduled for release tomorrow, and as usual, it is expected to bring volatility to the market. Therefore, the potential for moves outside of the intraday targets increases. The VPOCs for the 5D (4465), 20D (4465) and 90D (4415) periods are all situated within the current 4-week balance area, confirming the balance. In order to see a stronger directional move, the market must establish acceptance beyond this multi-week balance area. In terms of immediate focus, I'm keeping an eye on the low of the previous session at 4520.
For tomorrow, the Smashlevel (Pivot) is 4520, representing the low of the previous day. Break and hold above 4520 would target a cleanup of today’s poor high at 4539, as well as the final upside target of 4555. Holding below 4520 would target the weekly level of interest at 4500. Break and hold below 4500 would target 4489, as well as the final downside target of 4473.
Going into tomorrow's session, I will observe 4520.
Break and hold above 4520 would target 4539 / 4555
Holding below 4520 would target 4500 / 4489 / 4473
Additionally, pay attention to the following VIX levels: 14.86 and 13.60. These levels can provide confirmation of strength or weakness.
Break and hold above 4555 with VIX below 13.60 would confirm strength.
Break and hold below 4473 with VIX above 14.86 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.
Be sure to check out the Weekly Plan, which provides a broader perspective and highlights significant levels of interest to watch in the coming week.
Disclaimer: Futures and options trading involves a high level of risk, with the potential for substantial losses. The information provided in this newsletter is for informational purposes only and is not intended to be a trade recommendation. It is the responsibility of the reader to make their own investment decisions and they should seek the advice of a qualified securities professional before making any investments. The owners/authors of this newsletter are not certified as registered financial professionals or investment advisers.