June 4, S&P500 Premarket Plan and Missal
Paper planes
Image 1. ES profiles, RTH Monday to ETH Tuesday as of 8h30EST
Rinse and repeat? Monday’s action was a mini version of Friday - and nearly to the same closing price. As I mentioned last week, these seemingly large and clean moves are indicative of positioning. So what are we positioning again? An impending (or as I argue, current) recession, geopolitical chaos, or simply NFP?
It doesn’t matter. As day traders we trade the price action as it unfolds. However it helps to recognize these patterns which can be indicative of a bigger move and volatility. We use that information to size accordingly.
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Minister’s Missal
Notes are as of 7h15EST. I was not convinced by the ‘bullishness’ of the action at the close on Monday. I thus posted on my feed that Monday’s pivot of 5307 would pose some difficulty overnight. Indeed, we couldn’t even make it that far. As of writing, ETH inventory is net short, if it holds at the open expect a 70% chance of inventory correction.
The daily is technically OTFU although I personally like to see three consecutive days before putting more importance on this. Note the poor high which precipitated into a triple distribution on Monday’s action.
Participants initially could not decide on fair prices around 5300, 5280, or 5260. Ultimately we repaired poor structure as downside price discovery was rejected into the close. As we closed practically at 5300 once again, the plan and levels are not fundamentally changed. I expect a wider range which can see some lower levels open up.
I will also lower the pivot to 5295 - this was the level of Monday’s C period break of the IBL.
Image 2. ES daily profiles
I repeat here: buyers look for consecutive closes over 5300. Time above PDPOC builds a bullish base. A push over 5325 invalidates my early-week bearish lean, opening tests of selling tail 5344 and above. Sellers on the other hand look to cap trade above the pivot, an aggressive break of the ONL would look to challenge the PDL.
Tuesday Plan and Levels
Pivot 5295. Overall expecting range of 50 points with a possible 10 point extension.
a) Defense of 5280, time above pivot can break ONH. Volume above seeks 5323-25, with 5244 further above, a zone where selling may be encountered. Next stops on bullish momentum are 5358 high and 5368 ETH high.
b) Sellers spending time below pivot, then 5280, want to break ONL to challenge 5250. A break of PDL targets NPOC 5231 and volume shelf 5210… to psych level 5200.
c) I consider VIX above 14.65 a catalyst for seller momentum, and below 13.10 supportive of the buyers. Bulls want to see NVDA supported at 1140, a loss of 1125 can mean more downside and act as a drag on the indices. Likewise I think the bulls may see some comfort with BTC pressing above 70.8k. Finally, AAPL at 193 can be another proxy pivot, especially for ES.
Image 3. 4H ES levels
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