ES Daily Plan | September 6, 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
The overnight session was quiet, with price action confined to Tuesday’s spike area, resulting in a perfectly balanced profile. The RTH session mirrored yesterday’s, with limited interest in trading below the opening level during the initial balance. For new followers, the initial balance refers to the first 60 minutes of the RTH session (A and B-period), and this range is always highlighted by a white vertical line on the daily profiles on the chart. Take note of where sellers emerged—near the upper end of Tuesday's lower distribution, which was the key battleground in the short term.
The C-period saw a range extension to the downside, followed by further decline during the D-period. The final target was the unfilled gap at 5487.75, which sellers ultimately failed to fill during the F-period. Needless to say, coming within 2 handles of filling the gap made it a poor trade location for late sellers. In the afternoon session, a short-covering bounce unfolded, with sellers reloading at the Weekly Extreme Low of 5530. Heading into this week, the support area highlighted in the Weekly Plan between 5555 and 5530 has acted as resistance over the past two sessions. The question is whether sellers can sustain downside pressure tomorrow following the data. The 5D VPOC (short-term value) has shifted lower from 5610 to 5535, suggesting that sellers remain in short-term control until proven otherwise.
The session closed below the Weekly Extreme Low of 5530, which is not an optimal location to chase shorts, making tomorrow's session tricky. Adding to the complexity, we have the NFP report. I’m personally playing defense.
The market continues to establish value lower following Tuesday’s directional move away from the multi-day balance area. For buyers, the primary objective is to break the pattern of lower highs to bring the daily back to balance. A weak market would hold below the 5530-5540 resistance area, targeting a downside continuation. Failure to do so would open the door for a test of the 5569-5579 resistance—a crucial area for sellers to defend to maintain control. NFP tomorrow.
In terms of levels, the Smashlevel is at 5530/5540. Holding below this area signals weakness, targeting the unfilled daily gap at 5487.75. Acceptance below 5487 would target the daily NVPOC at 5468, with a final target at 5456 under sustained selling pressure. Failure to hold below 5530/5540 would open the door for a cleanup of Tuesday’s poor structure, targeting the resistance area between 5569 and 5579.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 5530.
Break and hold above 5530 would target 5540 / 5569 / 5579
Holding below 5530 would target 5487 / 5468 / 5456
Additionally, pay attention to the following VIX levels: 21.28 and 18.52. These levels can provide confirmation of strength or weakness.
Break and hold above 5579 with VIX below 18.52 would confirm strength.
Break and hold below 5456 with VIX above 21.28 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.
Thanks! Tomorrow feels like a coin toss!