ES Plan Week #18
I update via X based on this plan as the market session unfolds in real time. Make sure to follow for the real time market updates! X (Twitter)- trader_izzy
Here is previous weekend newsletter that set up this past week if needed for any review.
Pre-market updates along with updates as the session unfolds via X
Week #17 Recap
This past week is what traders want in a market. Level to level action with opportunities both long and short. The intraday sell/buy zones and pivots were on point into this week. I’ll give a quick breakdown below.
Zooming out into the bigger picture, the question heading into this week was whether we set up to retest the lows and if we do… do sellers follow through? There was one hiccup here. The way I navigate through the market is very easy. My pivot study marks out the range the market is trading in and it is different in every timeframe. Here is that hiccup, the daily timeframe was approaching its extreme low pivot- 4929. I talked about this in last weekend’s newsletter. When the market is reaching bigger pivot areas like these in much bigger timeframes, from my experience (4H and Daily), they do not break right away. This is where the market does its trapping.
If readers have been following, the 4963 lows set last week, came from the breakdown of the 4H pivot- 5191.5 and from there we look for expansion into the next bigger timeframe pivot to target, which in this case is the Daily Timeframe. I talked about this set up in ES Plan Week #16. (screenshot below)
As I mentioned above, when the market is reaching extreme upper or lower pivot areas, like in 4H and Daily timeframes, you do not want to be caught shorting the extreme lows or longing the extreme highs. Making this clear, breakdowns and breakouts are low probability trades. Yes, they are high reward trades when they do work but as I mentioned from my experience they are low probability, meaning the market is trapping participants most of the time before making the real move. And this is where I thrive with my entries… false breakdowns in an uptrend and failed breakouts in a weak market.
We never retested the lows (4963) which means the Daily Timeframe Range stayed intact and from here we look at the nearest broken down support area and that was 5047.
5047 was the 1H short lower pivot that broke down and led into the lows of 4963.
Dropping into the lowest timeframe I use (15min) I am able to pull the exact range the market consolidated before breaking down… 5038.5-5062.25. Anything below this zone sellers control and anything coming into this zone can get smacked down quickly, especially into the first retests back into the zone, have to exercise cautious and manage risk.
As buyers over took 5038.5-5062.25, if readers recall on Monday’s night newsletter heading into Tuesday I mentioned the next high conviction short trade comes into 5107.75-5123.25 which was the next seller zone above for those interested.
I myself did not take this trade as I was already trailing longs into this zone and managed risk as we approached it. Sellers once again proved to be here into Wednesday session rejecting buyers twice intraday and towards the end of the session putting the market back down into 5038.5-5062.25 zone.
Into Thursday session, it was very straight forward. Market was reentering the zone of 5038.5-5062.25 which on Monday we saw the lack of sellers here unable to follow through setting up a recapture and flipping into a buy zone that moved the market higher.
And without a doubt sellers attempted to follow through on Wednesday’s rejection from 5107.75-5123.25 below 5038.5 into 5022.5 support where the market was immediately met with buyers moving right back over 5038.5.
Buyers proved to have reclaimed this zone as every sell was met with buyers and moved the market right back into 5107.75-5123.25 heading into Friday session. This is the same set up the market plays over and over, in every timeframe.
Just as we saw buyers reclaim 5038.5-5062.25 Monday-Tuesday, we need to see this type of action heading into next week. As of Friday, sellers are being kicked out of 5107.75-5123.25, and if buyers can reclaim this zone it will set up 5176.5/5191.5 into next week. Here is my big cautious red flag though… every timeframe has a buyer or seller in control. This past week, all these zones were a battle between the smaller time frame traders. If we zoom out, 5191.5 is a bigger timeframe seller (4H). These bigger timeframe players like to lure in the smaller timeframe players into traps.
You have to think bigger. If you are a big player in this market with larger liquidity size, you cannot exit out in one single trade and you also want to get out with the best possible price. These players cannot sell/buy either when all of “retail” is chasing the same side as they are. It takes time to set things up properly.
What’s next?
4H Timeframe Pivots Range 5128.75-4963.5
5191.5 Breakdown Pivot
In ES Plan Week #17, we were looking for the market to set up a retest of 5191.5 and into this past Friday, we are nearing/setting up for this level now. The market was within 5308.5-5191.5 range before initiating into the downside. Anything into this range belongs to sellers. Knowing this here, any rallies into this area run the risk of getting smacked down quickly. The same question asked into 5038.5-5062.25 range to start off this past week will be asked here… are sellers still interested within this area to sell if we come to retest?
For buyers, a reclaim of this 5191.5 level needs to happen to set up 5257.5 upper target. Holding above 5128.75 (4H upper pivot) into next week will be a key component to keep 5150/5176.5/5191.5 retest in play.
Failing to keep over 5128.75 it is possible to see the market trade within the range of 5128.75-4963.5
1H Timeframe Pivots Range 5134.75-5022.25
Let’s recap a bit here into what set up the 5191.5 breakdown. The prior sell zone was 5285-5308.5 and the buy zone was set at 5185.75-5213.25. It was very clear to see here the sells were hitting the tape harder with no signs of slowing down and draining down demand into the buy zone which ultimately set up the 5191.5 breakdown.
(I covered what I wanted to see into this breakdown trade in ES Week Plan #16 which ended up playing out early into the week.) (Screen shot below of the chart on how we pull a range the market is in and zoom in to identify the buy and sell zones)
Into this week, if buyers can reclaim and hold 5107.75-5128.75 zone it will set up a retest back up higher into 5185.75-5213.25 where that 4H seller is sitting at that initiated the breakdown. How would that retest look? Is that seller still interested at that level? Something I mentioned in this newsletter, every timeframe has its own buyer and seller. The higher the timeframe buyer or seller, the stronger the activity is. Be cautious into this area as it is smaller timeframe zones that are looking to clash with a bigger timeframe player. This is where people get ran over if not managing risk properly.
As for the 1H range, currently 5134.75-5022.25 into Friday close. The 4H upper pivot is 5128.75 making the zone 5134.75-5128.75 into next key for buyers to maintain over to keep 5150/5176.5/5191.5 retest into play. I will go over the intraday zone in the “Playing Field” section but overall failure to hold 5134.75-5128.75 keeps the market within this hourly range and makes 5022.25 as the 1st lower downside target if market fails above 5134.75-5128.75. Failure of 5022.25 we looks to expand lower into 4963.5
Playing Field- 15min
Seller Zone 5185.75-5213.25
Buyer Zone 5107.75-51728.75
Upside
Starting off into the week, best case for buyers here is to remain and consolidate within the zone of 5107.75-5128.75 to set up a reclaim. The trigger to move higher as of now is at 5150-5146.5 to target 5176.5/5185.75-5213.25
First support area starting off the week is at 5104.5-5107.75, if this holds it can offer a direct bit to target back up level to level trades within the range. As readers know and by now, not my favorite levels to directly bid at especially into this 5107.75-5128.75 zone. The best long entry came into Thursday session into the reclaim of 5038.5 and I specifically mentioned I was looking for this trade. Market is up over 100 points here on that entry attempting to set a reclaim of a seller zone and sitting right underneath big 5191.5 breakdown level. This is where traders get ran over. No one wants to long at the lows but want to chase upside moves into areas of possible seller activity.
If readers have been following along, longs have paid very well since setting the 4963.5 lows over a week ago. I am currently flat heading into this week. I would want to see if buyers can really set a base here into 5107.75-5128.75. See sellers try to attempt a breakdown but seeing the dips bought back up would be a good sign that buyers are here and setting up for a breakout above 5128.75-5134.75.
I would avoid longs if 5104.5 support fails.
Downside
We are approaching areas of tough resistance here especially with 5185.75-5213.25. Sellers managed to get a breakdown on Wednesday from 5107.75-5128.75 into the buy zone below but failed to follow through 5038.5 showing lack of sellers. Seems as sellers are dropping the ball here at well into 5107.75-5128.75 so far.
A breakdown trade takes place at failure of 5104.5 to target back down 5095.25/5082-5076.75/5062.5-5038.5
If we revisit back down into 5038.5-5062.25 I want to see how strong that demand is on a retest compared to Thursday to consider shorts.
Another area I am looking at for seller activity is at 5185-5213.25 if we can get a push there into next week. It would also be a retest of 5191.5 breakdown level. I would be looking for a push above into the zone and fail to hold. This is one trade I am really looking at.
Here is breakdown recapping last week and how it unfolds going into this week.
Once again, entering into this week, going to be best to practice patience and observe how price reacts into these area of interests for sellers and how buyers react into it. Always be ready to react, and adapt to any current market conditions.