Morning Insights - ES

9/17/2024 - Tuesday

Sep 17, 2024

Good Morning Traders,

We had a significant push overnight as the market continues to price in the possibility of a 50-basis point rate cut coming up on Wednesday. The overnight session has pushed the market up by over 25 points, and we are now bumping into our overhead resistance zone at 5665. This sets the stage for an interesting trading day ahead.

We also have Core Retail Sales this morning before the market opens, a red-tag event that could bring additional volatility. With the market up significantly in pre-market, the focus should shift to identifying support levels where we can catch longs for potential continuation. Keep in mind that resistance is thinning as we approach all-time highs (ATHs) on the September contract. If you’re trading the December contract (without back adjustment), you should already be at ATHs.

A key takeaway from yesterday: on the December contract, the lows perfectly touched the weekly level at 5668.75 before continuing upward. This backtest was crucial, and it’s not surprising to see the continuation. While this move didn’t happen on the September contract, we must consider this information as we analyze the price progression today. The joy of roll-over, right? 😊

(December Contract Shown in Picture)

As always, stay safe, trade wisely, and adapt to the market conditions as they unfold. With the FOMC on Wednesday, the market is primed for volatility, so it’s essential to execute your plan and manage risk effectively.

Let's conquer these markets together!
Ryan Bailey
VICI Trading Solutions

Rollover Reminder:

As we’re in the middle of rollover for the ES Futures contract, I won’t be switching over until after the FOMC on Wednesday. Volume hasn’t fully rolled yet, and I’m tracking it closely. You can see in the CME data that September still holds the majority of the volume.

Additionally, the price action and support/resistance levels are much clearer on the September contract, so I’ll stick with it as long as possible.

Note for Think-or-Swim Users: To revert back to the September contract, type in /ESU24.

For TradingView Users: You can select the September contract month the same way by typing in the symbol.

NEWS

Options Levels:

As you’ve noticed, September options levels are no longer available. I’ve included December options levels for today.

Today's Trade Plan:

Longs:

5641.50-5639 (Daily Levels):

- This zone has been tested from below and should act as support on the retest from above. If price breaks below 5639, look for a secondary untested 1-hour level at 5635 and a 4-hour level at 5633 for potential support. These levels should provide strong reactions, with 5633 potentially being the low of the day. This area also coincides with the Globex POC, giving it additional confluence.

- 5625.50 (Yesterday’s Point of Control):

- If price moves as low as 5625.50, it’s crucial to see a reclaim of 5633 and **5640**. If you take a long here, be cautious and look for confirmation before scaling in.

Shorts:

I’m personally avoiding shorts today, as momentum and trend are clearly to the upside. However, if you are looking to fade the move:

- 5664.75-5668.75 (Resistance Zone):

- This zone has been tested but could still provide resistance. A short here would be a scalp only, as I expect price to push through this area and potentially use it as support.

- 5715 (Untested Daily Level):

- This is an untested level and the final resistance before all-time highs on the September contract. It’s not the most attractive setup, but if you decide to short here, keep stops tight and consider placing them above ATHs.

Trade Plan If We Move Lower:

Longs:

- 5564.75-5569.25 (4-Hour/Daily Combination):

- This zone shows strong confluence, including Thursday’s POC, last week's value area high, and monthly/daily/4-hour levels. I would look to buy here, with initial targets around 5578. If the price reclaims 5580.50, I’d add full size and trail the trade higher.

- Lower Buy at 5532 (Significant Daily/Weekly Level):

- If the price drops to 5532, use caution and enter with half size. Look for a reclaim of Thursday’s low and a move above 5543.75 (4-Hour) before adding full size. Targets are 5564.75 and higher.

- Final Long Opportunity at 5513.75-5516.25:

- This area offers significant daily support and should provide a reaction. However, the level must reclaim 5532 quickly to maintain long interest. Below 5500, bulls may struggle, and long opportunities become lower probability.

If price makes a substantial move lower….

Longs:

5564.75-5569.25 (4-Hour/Daily Combination):

- This zone shows strong confluence, including the Thursdays POC and last weeks value area high along with Monthly, Daily & 4HR levels. I’d consider buying here with initial targets around 5578. If the price reclaims 5580.50, I’d re-add full size and trail the trade higher.

Lower Buy at 5532 (Significant Daily/Weekly Level):

- If the price drops to 5532, be cautious and bid with half size. Look for a reclaim of Thursday’s low and a move above 5543.75 (4-Hour) before increasing position size. Targets would be 5564.75 and higher.

Final Long Opportunity at 5513.75-5516.25:

- This area is significant daily support and may offer a reaction. However, this level needs to immediately reclaim 5532 to maintain long interest. As we move lower, support becomes weaker, posing additional challenges for bulls. Below 5500, bulls may struggle to retain control and long opportunities become a lower probability of success.

CHEAT SHEETS