ES Daily Plan | September 26, 2023

The sellers maintain control, as one-time framing down is in effect across all time frames.

Buyers aim to primarily end the daily OTFD, which could potentially trigger a traverse of the highlighted blue distribution.

ES Daily Plan | September 26, 2023

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Contextual Analysis

The overnight (ON) session proved to be quite eventful, offering trading opportunities for both long and short positions. During the early stage of the Asian session, the Smashlevel of 4363 was tested and defended by the buyers, leading to a test of the resistance level from 4380 to 4390. The ON session reached a high of 4379.50, at which point sellers entered the market during the European session. Following the weakness, the level of 4363 was breached and then served as resistance before the next downside move. If you have reviewed the Weekly Plan, you are aware of the significance attached the 4350 level. Sellers faced difficulty in gaining traction below 4350 during both the ON and RTH sessions, a setup we discussed in the prior daily plan (false breakdown setup).

The RTH session opened on a true gap to the downside, which was immediately filled during the A-period. Did you observe how the initial attempt to break 4350 was absorbed by passive buyers, effectively trapping the aggressive sellers right away? Please take note of the included snapshot of the Footprint chart from the opening. This sequence resulted in a squeeze, which stalled right at the 4363 level. 4350 was later retested, and buyers didn't give the trapped sellers a chance to get out of their positions, ultimately resulting in another solid squeeze. Go back and review how the VIX retested its resistance level of 18.10 (outlined in prior plan) to the tick, during that retest of 4350 in D-period. The remainder of the session mainly saw consolidation above 4363. Buyers were unable to challenge the ON high, but a brief headfake flush during the L-period provided the necessary fuel to break the ON high in the closing session.

The sellers maintain control, as one-time framing down is in effect across all time frames since today’s break of 4350. The sellers main objective was to shift the short-term value (5D VPOC) lower, and they successfully achieved that today, currently situated at 4370. The primary objective for buyers is to end the daily one-time framing down by breaching a previous day’s high. This could potentially trigger a traverse of the highlighted blue distribution. However, trouble for sellers will only kick in if buyers begin to establish value above this distribution.

For tomorrow, the Smashlevel (Pivot) is 4373, a level that buyers had a challenging time reclaiming during the entire session. Holding above 4373 would target the daily NVPOC at 4390, as well as the resistance area from 4405 to 4415, effectively completing a full traverse of the highlighted blue distribution. Break and hold below 4373 would target today’s pivotal level at 4363. Break and hold below 4363 would target 4350, as well as the final downside target of 4338, which represents today’s ON low that remained untested in RTH.

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Going into tomorrow's session, I will observe 4373.

• Holding above 4373 would target 4390 / 4405 / 4415

• Break and hold below 4373 would target 4363 / 4350 / 4338

Additionally, pay attention to the following VIX levels: 18.10 and 16.30. These levels can provide confirmation of strength or weakness.

• Break and hold above 4415 with VIX below 16.02 would confirm strength.

• Break and hold below 4338 with VIX above 17.75 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.

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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.

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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.