ES Daily Plan | September 27, 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
Buyers quickly regained control of the 5783 level early in the overnight session, effectively negating any potential downside continuation toward the opposite side of the multi-day balance area. The buying aggression that followed was highly significant, not only reaching the initial upside target of 5798 but also breaking out from the balance area and tagging the final upside target at 5820, where a distribution was established pre-open. The overnight profile formed six sets of single prints, highlighting the intensity of the aggression.
The RTH session opened with a true gap up, above the final intraday upside target of 5820, while the VIX showed divergence by holding above its support level of 14.58 throughout the session, failing to confirm the strength above 5820. While this is just one data point, it’s a valuable piece of information to keep in mind as the RTH session begins. We saw an immediate inventory correction in the A-period, which is not uncommon when the market opens with a notable true gap higher, particularly given the significant poor structure from overnight. Typical references to monitor during an inventory correction after a gap higher are the FS VWAP, ON MID, and the prior day’s high, which should attract buyers if the market is strong. A strong market would subsequently regain the opening level and the overnight high, settings the stage for an upside continuation. However, after failing to hold the FS VWAP and finding sellers during the backtest of 5820, weakness started to emerge. The gap was ultimately filled in the C-period, with sellers gaining traction within the prior day’s range, which also was the multi-day balance high. This represented the most bearish outcome following a gap higher. The Smashlevel of 5783 was tagged in the H-period, providing a strong bounce back to the FS VWAP.
Today’s session was quite interesting, as the market saw a multi-day balance breakout during the overnight session, clearing all intraday upside targets pre-open (5820). However, buyers failed to sustain the true gap higher, resulting in a return to the 5778 HVN, which provided a bounce and ultimately led to a close outside of the balance extremes.
The strongest response from the market would involve acceptance above the 5808 level, marking the afternoon resistance, which would set the stage for price exploration higher. Conversely, a weak market would see a return to and acceptance within the highlighted multi-day value area, opening the door for a traverse. Carry forward the ON ATH at 5830, which remains untested in RTH. PCE data on deck tomorrow pre-open.
In terms of levels, the Smashlevel is at 5808. Holding below this level would target the multi-day value area high at 5789, with a final target at 5763 under sustained selling pressure. Failure to hold below 5808 signals strength, targeting today’s opening level at 5824, with a final target at 5841 under sustained buying pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5808.
Break and hold above 5808 would target 5824 / 5841
Holding below 5808 would target 5789 / 5763
Additionally, pay attention to the following VIX levels: 16.14 and 14.62. These levels can provide confirmation of strength or weakness.
Break and hold above 5841 with VIX below 14.62 would confirm strength.
Break and hold below 5763 with VIX above 16.14 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.
Two straight fails with no real breakdown 🤔
Thanks Smash!!