ES Daily Plan | September 16, 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
As mentioned in the Weekly Plan published yesterday, starting tomorrow, I will transition to the ESZ24 (December) contract. Please note that I do not back-adjust my charts. On the chart, I have marked the settlements for both ESU24 (September) at 5629.75 and ESZ24 (December) at 5691 from Friday’s session, reflecting a +61.25 point difference. I suggest marking 5629.75 on your chart, as roll gaps often tend to get filled. The levels for next week are based on Friday’s session from the ESZ24 (December) contract. Contract rollovers often lead to confusion. While some traders choose to back-adjust their charts, I prefer to keep my past levels unchanged and simply deal with the roll gap. Regardless of whether you choose to back-adjust or not, the crucial point is that my weekly levels of interest remain the same.
With key events this week such as Retail Sales data, the FOMC meeting, contract rollover, and OPEX, coupled with the market nearing all-time highs, it's wise to avoid making bold predictions about market direction and instead adopt a day-by-day approach, which is my usual approach anyway.
In terms of levels, the Smashlevel is at 5691, marking Friday’s ESZ24 (December) settlement. Holding below this level would target Friday’s low at 5665, aligning with the prior 10-day balance area, with a final target at 5642 under sustained selling pressure. Failure to hold below 5691 would target the non-back-adjusted ATH at 5721.25, with a final target at the SPX ATH at ~5735 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5691.
Break and hold above 5691 would target 5721 / 5735
Holding below 5691 would target 5665 / 5642
Additionally, pay attention to the following VIX levels: 17.48 and 15.64. These levels can provide confirmation of strength or weakness.
Break and hold above 5735 with VIX below 15.64 would confirm strength.
Break and hold below 5642 with VIX above 17.48 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.
