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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
The overnight session was marked by weakness following a breakdown from the short-term distribution of interest between 7811 (UT1) and 7794 (Smashlevel). Failure by buyers to defend 7794 led to a rotation lower toward the HVN at 7772 (DT1), where the auction stalled ahead of the RTH session.
Buyers struggled to gain traction above 7772 early in RTH, setting the stage for continued intraday weakness. The VIX remained above its resistance level at 15.56 throughout the session, contributing to downside pressure.
Change took place in the C-period, as sellers extended the rather narrow Initial Balance to the downside. In the process, our final downside target at 7738 (FDT) was tagged. Price looked below 7738 and failed, triggering a move higher. While the reversal was driven by news headlines, the structure was textbook Look Below and Fail (LBAF), with price swiftly taking out a key level before quickly reclaiming it and building value/acceptance back above it (see Session Recap).
The market spiked above 7772 (DT1) twice following headlines, with responsive sellers stepping in on both occasions. This ultimately led to a revisit of 7738 in the M-period, with the session closing within Thursday’s Initial Balance.
Session Recap
Today’s session showed no interest in trading within Friday’s value area or above last week’s VPOC at 7772, a short-term bearish development that ultimately led to expected weakness. The auction is now back within Thursday’s Initial Balance.
Friday’s low at 7752 is a key reference for gauging the short-term state of the auction. Buyers need to reclaim this level to avoid acceptance into the lower part of Thursday’s range. Failure to do so would maintain downside pressure, targeting Monday’s bull gap at 7718,another crucial reference.
In terms of levels, the Smashlevel is at 7752, Friday’s low. Holding below 7752 would maintain downside pressure and target Monday’s bull gap at 7718 (DT1), where a potential LBAF is of interest, with the HVN at 7687 (FDT) serving as the final downside target under sustained selling pressure.
On the flip side, reclaiming 7752 shifts focus to the HVN at 7772 (UT1), where a potential LAAF is of interest. Acceptance above 7772 would signal intraday strength, targeting Friday’s IB high at 7794 (UT2), with 7811 (FUT) 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 7752.
Break and hold above 7752 would target 7772 / 7794 / 7811
Holding below 7752 would target 7718 / 7687
Additionally, pay attention to the following VIX levels: 16.82 and 15.32. These levels can provide confirmation of strength or weakness.
Break and hold above 7811 with VIX below 15.32 would confirm strength.
Break and hold below 7687 with VIX above 16.82 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! Caught a good short from 7794 overnight that PAID!
Thank you Smash !