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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.
Contract Rollover
A quick reminder: I’ve switched to the ESZ26 (December) contract. As always, I do not back-adjust my charts. The roll gap at 7659.50 (ESU26 contract) has now been filled.
Contract rollovers can be confusing. While some traders back-adjust their charts, I prefer to leave historical levels unchanged, resulting in a visible roll gap. This is purely a matter of personal preference; neither approach is inherently superior, and both have their pros and cons.
For short-term traders, the impact is minimal, since we navigate the market day by day. During rollover periods, I typically scale back activity because order flow becomes noticeably less reliable.
Contextual Analysis & Plan
After Wednesday’s double distribution trend day to the downside, the key question was whether sellers could sustain the move by building value within the lower distribution and accepting lower prices. This was particularly important for sellers, as the move was initiated from value, with both Wednesday’s VPOC and the composite HVN located in the upper distribution.
The key level to observe was 7634 (Smashlevel), which sellers failed to defend early overnight. Stronger sellers should have had little trouble defending this level. Instead, 7634 was breached and backtested before the auction continued higher toward 7669 (UT1) (see Figure 1). The pace of the move made it clear that a lot of traders were caught off guard. The final upside target at 7690 (FUT) was tagged during the Euro session, triggering a small pullback, but buyers managed to hold within Wednesday’s upper distribution, signaling strength.
"…reclaiming 7634 shifts focus to today’s breakdown single prints at 7669 (UT1), with 7690 (FUT), the HVN, serving as the final upside target under sustained buying pressure”
Sellers defended multiple tests of 7690 before another 35+ handle squeeze took place pre-open. RTH then opened with a true gap higher, 24 handles above 7690 (FUT), making it an unfavorable location to chase new longs. With overnight inventory 100% net long, the expectation was for a counter-auction (pullback) after the open. Failure to see one would have signaled extreme strength, which is not a condition I’m interested in participating in with new positions given the poor intraday risk/reward profile.
Fortunately, the counter-auction took place, testing the 7690 level. There are instances where one can seek longs at a FUT level if the VIX remains below its support level, which it did today. However, keep in mind that target expectations must be adjusted accordingly. The session remained within its Initial Balance range and was rather uneventful, with the upside capped by 7711, a composite low volume node (LVN).
Session Recap
Wednesday’s double distribution trend day to the downside was heavily rejected today, resulting in a return to value. The key question now is whether sellers’ failure to sustain Wednesday’s lower prices will increase confidence in a move in the opposite direction.
The weekly pivot at 7711, which capped both today’s and Monday’s sessions, will be key for buyers to reclaim in order to demonstrate strength.
In terms of levels, the Smashlevel is at 7711, the weekly pivot. Holding below 7711 would target the HVN at 7690 (DT1). Acceptance below 7690 would signal intraday weakness, targeting 7669 (DT2), with 7634 (FDT) serving as the final downside target under sustained selling pressure.
On the flip side, reclaiming 7711 shifts focus to 7735 (UT1). Acceptance above 7735 would signal intraday strength, targeting the daily NVPOC at 7757 (UT2), with 7775 (FUT), the HVN, 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 7711.
Break and hold above 7711 would target 7735 / 7757 / 7775
Holding below 7711 would target 7690 / 7669 / 7634
Additionally, pay attention to the following VIX levels: 16.28 and 14.62. These levels can provide confirmation of strength or weakness.
Break and hold above 7775 with VIX below 14.62 would confirm strength.
Break and hold below 7634 with VIX above 16.28 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 KING!
Excellent work as always. Thank you for doing what you do.