Timeframe Overview
Monthly OTF: up, ends: 4500
Weekly OTF: up, ends: 4560
Daily OTF: 8 day balance; ends to the upside: 4633; ends to the downside: 4557
Friday Session Recap
Let’s look at what we stated in Thursday’s trade plan:
Going into today’s session, I will observe 4580. This is the VAL from Thursday’s session, and seems to be a key point from sessions earlier in the week (near VAL for many sessions). To the upside, I want to see buyers reclaim at least the halfback of yesterday’s session at 4594, from there, will they have the strength to reclaim the sessions gap fill / swing low at 4609?
ES opened again with a gap to the upside at 4596, nearly 20 points after Thursday’s selloff, and already well above our pivot as well as above our first ‘bull’ level. We know what to look for in these gap up scenarios: attempts for sellers to close the gap below (i.e. fading / short opportunities), or in the contrasting scenario, failure for them to make any progress and look for trend continuation (long opportunities). Indeed, during A period, sellers made a decent attempt to push us below the opening print, down to 4589, but indeed (and as we’ll see later in I period), there were strong buyers around the 4590 area (this is important to note going forward).
While the first bit of A period was a battle between buyers and sellers, it was clear by the end of A that the trend appeared to be up, and B period provided a few opportunities for longs at decent prices of 4599, which is exactly what we did and outlined in Thursday’s Trades & Session Review section. However, due to another small look below and fail in C period, this trade was not exactly a perfect entry and we did get stopped out with a less than optimum winner, but still a winner on the last scale out. After the last retest of 4598 in C period, ES rallied all the way to what would be it’s HOD in E period at 4616.50.
F and G period did suggest some weakness, but with a possible trend up day in play, it’s often unwise to consider shorts while we remain above the IB (4607 for reference). For us, it was only during H period where the IB high was broken that shorts could be a possible trade, ES indeed sold all the way down to the LOD, even creating a NLOD at 4588.75. Then there was a beautiful trade opportunity that we missed: a classic look below LOD and fail! Below 4590, buyers stepped in with vigorous strength, vaulting us all the way back up above the IB high (4610+!) by K period, a trade that would have provided at least a 1:15 risk:reward! For the remainder of the session, it remained a battle around that apparently critical 4609 level. ES closed for the cash session at 4607.75, just above the IB high for the day.
Market Structure
Friday’s session failed to take out the highs of Thursday’s, so we again remain in balance, however note that there is some bullish bias by the fact that we have a higher low (4553 from Thursday vs. low of 4588 on Friday), which could be important to take into account. The session itself was quite balanced, with excess 4589-4596 and one print of excess above 4616, and value the same as the close at 4607.
Trade Plan
Going into Monday’s session, I will observe 4609. This is the key level which we’ve rejected off a number of times at this point, and haven’t been able to build sustainably above. Building above 4609 I would look to build at and above 4623, the VPOC from Thursday’s session (despite the selloff), and then above 4633 to form a new high for July. Below targets the mental level of 4600, and then that 4590 level, which buyers have seemed to be eager to defend on multiple occasions at this point. Below 4590 targets 4580, Friday’s pivot.
Key Levels
Pivot: 4609
Bull Levels: 4623, 4633
Bear Levels: 4600, 4596, 4590, 4580
Notes: EU CPI overnight (05:00AM EST), otherwise, not much for prints on Monday. Monday is the last full trading day in July. Will bulls try and close the month at a new high? 😉 Or will we remain in balance, for the 9th session going? 😴
Trades & Session Review
+$132. My live small $500 account is again open for active trading after hitting my weekly loss limit last week, so I was trading that account today. We took trades on both ES and NQ today, but my NQ trades were (suprisingly) better executed. Let’s go over the ES trades first:
In a mini pullback in A period, I went long assuming a continuation to that Thursday VPOC level at 4623, However, a liquidiation followed. Here I could have cut my trade earlier, as orderflow was showing stacked sell imbalances and the tape looked ugly. Alas, my stop was hit. As we approached new lows, again I was too eager (and looking at cumulative delta, there were no signs of reversal!), and I went long again, and was once again stopped. Finally with my third attempt, a long near the lows of the morning, payed for at least half my mistakes at the beginning of the session:
However, most of the morning I was busy with MNQ, where most of the profit was made for the day:
Here too, after an initial stop out (I like to keep a tight 10 point stop with the wacky MNQ/NQ), it was clear I was still correct, and I got back in, leading to the big winner today of nearly 20 points, and this was also nearly the MFE for this trade. It could have been a single that as we delayed to progress throught the ON high, it was time to go short, but as you all know, I’m still learning how to short properly. Also, at the lows of day, I made another mistake. First trade was good to cut as I saw hesitation, then, when I got back in, I was trading my P/L, not my strategy (when positive delta clearly was showing a recovery possible!). So I got shaken out and closed for a small 1 point papercut, where this would have likely been the largest winner of the day as we rallied back up 25 points to VWAP!
Today was a nice lesson in sticking to my thesis, that even though my execution wasn’t perfect with a few stop outs, I was ultimately correct, leading to a nicely green day.
Overall a nice 25% return on the account, can’t complain!
Cheers and as always, good luck out there!
-Chris
A reminder that I am still ultimately a beginner to intraday trading and trading futures. This is not an alert service and none of this is financial advice.