ES Daily Plan | September 20, 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
Just a quick reminder that I have transitioned to the ESZ24 (December) contract. Please note that I do not back-adjust my charts. I suggest marking 5629.75 on your chart, as roll gaps often tend to get filled. Regardless of whether you choose to back-adjust or not, the crucial point is that my intraday targets remain the same.
Unfortunately, yesterday's plan was published later than expected, so the early move in the overnight session, which reclaimed 5701 and pushed higher toward the resistance area between 5721 and 5731, had already played out. Nevertheless, selling activity emerged within the resistance area, leading to a pullback to 5701, a level buyers managed to defend. A second test of the 5721-5731 resistance resulted in a break and continued upside momentum, effectively negating Wednesday’s excess. The VIX remained below its support level of 17.16 throughout the session, supporting the potential for further upside.
With the RTH session opening with a true gap up, the conditions were straightforward, as outlined in the pre-open post on X. A strong market would hold above 5756, marking the prior day’s high, targeting 5795, and potentially the Weekly Extreme High of 5820. A look above the ONH and fail triggered an inventory correction that filled the gap at the 5756 level in the A-period. Once the gap was filled, it was crucial to monitor whether sellers could gain traction within the previous day’s range, which would signal a bearish outcome. The market only allowed a few minutes of trading below 5756 before reversing, signaling strength. The 5795 level, marking the lower end of the weekly resistance area from the Weekly Plan, was tagged in the I-period. HOD: 5797.50 (ATH).
Today’s session saw a breakout from the 3-day balance area, following a strong directional move overnight that led to a true gap higher and effectively negated Wednesday’s excess high. Monitor for continuation (acceptance) or lack thereof (rejection). Higher or unchanged value would signal a bullish response, while a return below 5756 would open the door for a failed breakout scenario.
In terms of levels, the Smashlevel is at 5785. Holding below this level would target the prior 3-day balance high at 5756, with a final target at the support area between 5731 and 5721 under sustained selling pressure. Failure to hold below 5785 would target the current ATH at 5797.50, with a final target at 5820 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5785.
Break and hold above 5785 would target 5797 / 5820
Holding below 5785 would target 5756 / 5731 / 5721
Additionally, pay attention to the following VIX levels: 17.28 and 15.38. These levels can provide confirmation of strength or weakness.
Break and hold above 5820 with VIX below 15.38 would confirm strength.
Break and hold below 5721 with VIX above 17.28 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.
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.
Thanks Smash!