Smash ES Plan | November 23, 2022

Break of the 3 day balance to the upside, meaning daily back to OTFU mode. We close out the session with a spike to tag our last intraday upside target.

Acceptance or rejection of the higher prices of the spike is what I observe short-term.

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Recap & Plan

The ON session was trading within prior day's range for the most part. We once again tested the lower end of the blue distribution (ONL: 3945.25) during the Europe session, and found responsive buyers. Buyers managed to take out yesterday's high prior to RTH open, meaning RTH opened on a true gap up.

After a quick look above the ONH and fail the first minute of RTH, we got an inventory correction. The inventory correction gives us valuable market generated information. Failure to fill the gap or only filling partially is a sign of strength and can set up long opportunities. If the gap fills, we want to observe if we get acceptance back within prior day’s range. That would be the most bearish outcome. The gap got filled today in A-period, but note how little time and volume was spent within prior day’s range and on top of that, no interest within prior value area, meaning sellers failed to gain traction. That was a clue to be cautious on the short side. Today’s LOD was 3962.75 and Smashlevel for the session was 3962. Buyers target was the 3 day balance high, which was weak as discussed. We formed a P-shape in the AM-session with the main distribution just below that weak area and we finally took it out in H-period. Note the single prints in H-period, stops getting triggered above that weak area. That set of single prints remained unfilled. The last upside target was 4009, which was tagged closing session (HOD: 4012.50).

We end up with a triple distribution trend day up with 3 sets of single prints and we closed out the session with a spike up since M-period made a new daily high. We were essentially one time framing up intraday for the whole session, meaning there were few arguments to try and trade against it. The pullbacks were so shallow it was even hard to get good long entries. Buyers wanted to see a daily close above 4009 and they barely got it when M-period spiked. Now we monitor for continuation or lack of. Trading within and above the spike (Acceptance) is the most bullish outcome, since that confirms the higher prices of the spike. Trading below the spike (Rejection) is the most bearish outcome, since that negates the prices of the spike. Note that we are at the top of the blue distribution, meaning initiative buyers are needed for a continuation.

Note the exhaustion print on the footprint in M-period and note the aggressive sellers that followed. Buyers want to see that high taken out fairly quickly, meaning already in the ON session. The upside magnet in case of a follow through is the MA200, note the confluence with the last intraday upside target for tomorrow. Lack of initiative buyers above the blue distribution will attract responsive sellers and the main target will be the support area and downside magnet 3967, which is the monthly VPOC.

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