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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.
Catalysts
Contextual Analysis & Plan
On Friday, it was all about whether buyers could remain within Wednesday’s range by holding above 7758 (Smashlevel). The 7758 level played a pivotal role during both the overnight and RTH sessions, delivering great trading opportunities (see Session Recap).
The closing period, referring to the M-period, delivered a great reversal sequence from an order flow perspective (see Figure 1). Notable aggressive selling failed to push price lower as passive buyers absorbed the selling pressure, ultimately resulting in a closing squeeze. The entry bar is not the reversal bar itself, but the following bar, as the idea is to join the move once aggressive buyers step in following the absorption.
Session Recap
The daily has formed a 5-day balance above last Monday’s gap area, which remains only partially filled following Thursday’s weakness. While this multi-day balance remains key this week, our short-term focus will be on Friday’s auction.
Looking at Friday’s profile, a small balance developed between 7794 and 7811, with 7794 aligning with Friday’s IB high and the Weekly VWAP. This distribution is now a key area of short-term interest.
A breakout targets the HVN above at 7838, where value was established on Monday and Tuesday, while a breakdown targets 7772, where value was established on Wednesday and Thursday.
In terms of levels, the Smashlevel is at 7794, Friday’s IB high, which closely aligns with the Weekly VWAP. Holding above 7794 signals stability and targets 7811 (UT1), where a potential LAAF is of interest. Acceptance above 7811 would signal intraday strength, targeting the prior ATH at 7838 (UT2), with 7855 (FUT), the bullish imbalance target, serving as the final upside target under sustained buying pressure.
On the flip side, failure to hold 7794 would shift focus to the HVN at 7772 (DT1), where a potential LBAF is of interest, with 7738 (FDT) serving as the final downside target under sustained selling pressure.
Visual Representation
Levels of Interest
Going into tomorrow’s session, I’ll closely observe the behavior around 7794.
Holding above 7794 would target 7811 / 7838 / 7855
Break and hold below 7794 would target 7772 / 7738
Additionally, pay attention to the following VIX levels: 15.56 and 14.18. These levels can provide confirmation of strength or weakness.
Break and hold above 7855 with VIX below 14.18 would confirm strength.
Break and hold below 7738 with VIX above 15.56 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 Smash! Have a great week.
Thanks Smash!