Smash ES Plan | December 6, 2022

We continue the pattern of lower highs and lower lows as we continue to clean up the poor structure from 11/30. Double distribution with the LVN in between of short-term interest.

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Recap & Plan

Smashlevel 4065 was acting as support during the Asia session and was breached prior to the Europe session, where it then acted as resistance. 4084 was the key upside level that would put recent sellers in trouble and ended up not being tested. I've added a brief recap below illustrating today's correlation with the ES and VIX levels from prior plan.

RTH opened around MA200, meaning we got some choppy price action initially. Sellers main objective was to target the 2 day balance low and that was completed already in B-period, meaning the last intraday downside target 4033 was tagged. A break and hold below 4033 would put the recent breakout in trouble, meaning there was potential for fills of that poor structure from 11/30. I added two VIX levels (19.96 and 1816) to help you gauge the strength/weakness, should we take out 4120 or 4033. Sellers first attempt to break and hold below 4033 failed, leading to a retest of the open level, which found sellers. VIX was actually holding above 19.96 during that whole sequence, meaning sellers couldn’t be ruled out quite yet. Holding above 4033 with VIX break and hold below 19.96, would be a much preferred scenario for buyers, which didn’t happen. Sellers second attempt to gain traction below 4033 was much more successful. Again, I will recap the correlation on Substack for easier interpretation.

We end up with a double distribution with one set of single prints and daily is now one time framing down, as we broke the 2 day balance to the downside. The poor structure from the 11/30 trend day is almost fully cleaned up. We do have a small area of single prints left to carry forward, highlighted in blue. My short-term level of interest is the familiar level 4007, which is today’s low volume node separating the double distribution. Buyers want to establish acceptance back within the upper distribution to target a traverse back towards the prior 2 day balance low and MA200. Sellers main downside target is the magnet 3967 and the Weekly Extreme Low 3960. We are currently within the support area from the Weekly Outlook, meaning an area where buyers want to be active. This cleanup of structure is healthy, but a break and hold below 3960 would target the poor/weak lows around 3940, which I assume would trigger a lot of stops.

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Brief recap of today’s ES and VIX correlation.

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