ES Plan Week #19 [Decompression Coming?]
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
Weekend newsletter for more details on overall zone and ranges if needed.
Picking Up Where We Left Off
I was out of the screens Wednesday Session but advised to keep eyes within the same zone of focus which has been 5185.75-5213.25
Since entering this 5185.75-5213.25 zone on Monday session, the market has been consolidating within this zone Tuesday-Wednesday session so far offering very little opportunities intraday.
Wednesday overnight session was holding very close into 5213.75 and as we were heading into the cash open, sells triggered to test the lower part of this zone at 5185.75 only to move right back up with no follow through to either upside or downside.
From last Thursday’s low at 5036.25, the market has rallied nearly 200 points into upside. Market volatility moves in waves of compression followed by decompression. Think about this as a spring mechanism. The more you compress the spring, the more energy builds which then is followed by the decompression phase which means volatility increasing. Once we see decompression take place, the endless cycle begins once again.. compressing, compressing until to much energy has built up which is immediately followed by decompression.
Taking this nearly 200 point move into the upside, taking in consideration the area buyers drove price up which was the breakdown of 04/15… it is no surprise the market has been stuck here in a very slow, tight sideways movement.
Let’s get into what’s next.
4H TimeFrame Pivot Range 5226.75-5036.25
The wider range the market broke out of previous week was set here in this 4H being 5154.25-5036.25
As readers know, above 5154.25 we would start to look to retest back above 5191.5 breakdown pivot from 04/15. As of now, the market is trading within 5185.75-5213.25 which was the zone that triggered the 5191.5 breakdown to set the April lows.
We will get into the 5185.75-5213.25 zone below, but to put a breakout higher it begins with 5226.75 into the rest of the week. Above 5226.75 targets on upside remain 5236.5/5257.5/5285/5308.5
The short trigger remains 5185.75 to get anything started into downside with targets set at 5169.75/5154.25/5128.75-5104.5
1H TimeFrame Pivots Range 5218-5188.75
Not anything new to pull from this timeframe, but let’s recap a little here to better understand and manage risk.
5185.75-5213.25 zone- This is something I recapped into ES Plan Week #19 newsletter and also that if readers have been following along is the zone we were looking to target off a 5047 reclaim explained back in ES Plan Week #17. (screenshot below)
Friday’s breakout above 4H pivot of 5154.25 set up Monday for a follow through day to retest back into this zone for the first time. And since Monday it has been nothing but slow, choppy price action within this area.
We saw buyer attempt a move out of 5213.25 Tuesday which was met with sellers. Wednesday Session buyers stepped in right where they needed to, to keep this range intact. Buyers need to make a move above 5213.25 and hold to keep a breakout above 5226.75 in play within the next two sessions.
Failing below 5185.75 I would be cautious with longs and be more patient as we still have yet to see how any dip occurring here into this part of the market is going to be in terms of strength and impulsiveness of any sells that trigger.
15Min Playing Field
Seller Zone 5185.75-5213.25
Buyer Zone 5104.5-5128.75
Overnight Intraday Pivot Range 5217-5207.5
Upside
Best case scenario here remains intact so far. 5185.75-5213.25, this zone it is best for buyers to keep consolidation within this zone to keep an attempt to set up a break higher.
I will be watching 5213.25-5217 into tomorrow to trigger longs in play. Getting through 5213.25-5217 1st target area is set at 5226.75 (4H Upper Pivot) which is the true breakout trigger to move the market higher targeting 5236.25/5257.5
Early Wednesday Session, 5185.75 support was tested and offered entry into longs once more which is currently setting up Thursday as a follow through day. Not my favorite area to bid at, however as long as 5185.75 can hold keeps longs in play and offers entry.
I would be cautious with longs on failure of 5185.75 or be a little more patient. The area I am interested to watch below 5185.75 is set at 5104.5-5128.75.
Downside
Immediate overnight short trigger is set at 5207.5 which only puts 5185.75 into play. To get anything rolling for sellers here, as I have been repeating over and over is set at 5185.75.
Below 5185.75 downside targets are set at 5169.75/ 5154.25/ 5128.75-5104 for now.
If buyers gain momentum above 5213.25 I would be a little more patient with shorts as if true strong demand is set here within 5185.75-5213.25 this zone, it sets up a move into 5285-5308.5 where is the next area of liquidity.
Summary
When given this chart for traders to look at, either side can argue why downside is in play or upside. Our job as a day trader is not to predict and forecast direction. Doing that and getting to drawn into that develops bias and can block you from seeing other possibilities that may be unfolding due to being locked in to a perception. Being locked into a perception, also makes it difficult to accept and get out of losing trades to manage risk properly.
This is where our mental skills become crucial. To be patient and disciplined for a signal to enter short/long on the plans’ triggers and not be drawn away from outside noise which can be news, headlines, and/or other people’s predictions, etc. to make trades that deviate away from the plan due to FOMO or impulsive behaviors. Don’t let your mind be hijacked in this confusion. In an uncertain environment anything can happen at any moment and you do not control that.
We focus one session at a time, one moment at a time. Staying present and ready to react upon what is unfolding in real time. Let other anxious and impulsive participants burn capital here on predictions and wanting to prove that they are right despite charts showing otherwise.
I will update as usual early before cash open on any overnight changes and what I a looking at. Stay focused!