ES Daily Plan | September 30, 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
On Thursday, the market attempted a breakout from the 5-day balance area, but the effort ultimately failed. The failed breakout should have triggered weakness, but it didn’t, signaling a lack of stronger sellers and creating a tricky trading environment. This lack of conviction from both buyers and sellers continued on Friday, forming an inside day, which is of short-term interest.
As outlined in the Weekly Plan, a breakdown of the inside day could attract sellers or trigger stops, as it would mark the end of the pattern of higher lows on the daily chart. Failure to break this pattern removes the potential for change, keeping buyers in firm control.
In terms of levels, the Smashlevel is at 5782, marking both Friday’s low and a notable LVN. Holding above this level, thus maintaining the daily one-time framing up, would target 5805, with a final target at the resistance area between 5830 and 5840 under sustained buying pressure. Failure to hold above 5782 would end the daily one-time framing up, targeting 5763, with a final target at 5740 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5782.
Holding above 5782 would target 5805 / 5830 / 5840
Break and hold below 5782 would target 5763 / 5740
Additionally, pay attention to the following VIX levels: 17.96 and 15.92. These levels can provide confirmation of strength or weakness.
Break and hold above 5840 with VIX below 15.92 would confirm strength.
Break and hold below 5740 with VIX above 17.96 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.
Thank you for highlighting that 5782 is a crucial level to watch. I'm currently practicing with a Tradovate demo account. I initially thought the price would keep falling and expected absorption to occur at a lower level. To my surprise, absorption appeared quickly after a slight drop. As a result, I closed my short position and decided to join the bulls.
I'm using MotiveWave, where the red box indicates areas of absorption. However, I'm not entirely clear on how it calculates this. Why didn’t the red box show up immediately when the price reached that level? Instead, it only appeared after a strong rebound. Additionally, during price fluctuations, the red box keeps disappearing and reappearing until the 5-minute candle closes, at which point the red box is confirmed to exist.
video link:
https://x.com/williamwong47/status/1840937642520932773