S&P500 Trading Plan - ES Futures
10/8/2024 - Tuesday
Hello Traders,
We are back in business and I wanted to get this out to you in the evening so you have it ready for tomorrow. Today started off as a slow and uneventful session... until it wasn’t. As the day progressed, the market made a swift move to the downside, closing the session by testing our key weekly level at 5726. We were able to capitalize on this move since, despite the bullish rally on Friday, price failed to hold critical support levels today, signaling a shift to the downside.
This 5726 level is a crucial weekly support, and holding above it will be significant for maintaining the current bullish structure. A failure here could be a sign of a potential bearish momentum shift. The week ahead is light on volatile news events, with no major red tag news until Thursday or Friday, so technical levels will play an even larger role in market direction.
In the absence of major catalysts, keep an eye on Fed speakers throughout the day, as any unexpected comments could spark sudden moves. Check below for the times and details on these events, and take a look at the trading plan to ensure you’re prepared for any potential setups.
NEWS
No Red Tags, Only Fed Speak
Options VOL
Levels
Cheat Sheets:
Weekly/Daily TPOs
Daily RTH
4HR
1HR
Trading Plan:
Due to the inability to hold and maintain support, we currently have a bearish lean. However, as long as we remain above 5726, the broader trend remains bullish. Here are the key levels to watch for potential reactions:
Bullish Case:
Critical Support: 5726 (Weekly Level)
This is a key level for gauging market direction. Holding above it keeps the bulls in control, but a loss of 5726 could bring a significant move lower.
5749.75-5755 (Daily Support Zone):
This zone is critical for continuation higher. 5755.75 marks the daily leg to the all-time highs, making a reclaim of this level essential for the bulls.
5736.75 (Untested 4-Hour Level):
This level has been significant throughout the week and remains untested. There’s a clean set of singles just below it that may need to be filled, so expect a reaction here on first touch.
5770 (4-Hour Level):
If price reclaims and holds above 5755.75, look for a potential test of 5770, which could provide continued resistance.
5778.25-5784.25 (Major Resistance Zone):
This zone has been played today, but this area may get retested. This area includes the 2-day composite POC at 5778 and the weekly Volume POC, making it a significant area to monitor for either a breakout or rejection.
5800 (Key Level for Legging Higher):
This is our last major resistance level before targeting the 5800+ zone. A clean break above 5802.00 could trigger another leg up. However, a rejection here could bring swift downside action.
Bearish Case:
If 5726 fails to hold, the focus shifts to the following support levels:
5722 (Daily Level):
Below 5726, the next immediate support is 5722. Losing this level could lead to a quick move down into 5709-5705.
5709-5705 (4-Hour/Daily Combo):
This zone needs to play and see a quick reclaim of 5726 for the bullish trend to resume. If we get below 5709 and fail to reclaim, the move could accelerate lower.
5690 (Weekly Leg Tip):
This is the weekly leg tip and a tested level that could still play again. However, a sustained break below 5690 would suggest a shift in momentum to the bears.
5668.75 (Major Bull/Bear Line):
This is the major bull/bear line for a sustained move higher or lower. Losing 5668 would fully shift the momentum into the bears’ hands, setting the stage for a deeper pullback.
5661 (Daily/Weekly Combo):
There’s a combination of daily and weekly levels here that could provide a reaction, but we’d want to see an immediate reclaim of 5668.75. Failure to reclaim would indicate a potential catastrophic breakdown for the bull trend.
Conclusion:
We’re at a critical juncture, and how price behaves around 5726 will be crucial. If we hold above and start regaining levels like 5755 and 5778, it would signify a renewed bullish push. However, losing 5726 and especially 5668 would significantly damage the bullish case.
Stay cautious, follow the plan, and be prepared for sudden shifts as the market reacts to any unexpected news. Together, let’s conquer these markets!
Ryan Bailey
Vici Trading Solutions