Full ES Trading Plan For Sep 17th** The Levels in this section all now reference the December (ESZ2024) contract prices.**
Plan for Tuesday: • Supports are: 5690, 5684, 5680 (major), 5671, 5662-64 (major), 5654 (major), 5650, 5645, 5639 (major), 5632, 5627 (major), 5620, 5614 (major), 5607, 5598, 5588, 5579 (major), 5573 (major), 5568, 5562, 5548-52 (major), 5544, 5532, 5523-26 (major).
• In terms of lvls I’d bid direct: Conditions remain extremely poor and this partially attributed to contract rollover and partially attributed to the market waiting on FOMC Wednesday. Setups are scarce, and overtraders will continue to be punished badly. In these conditions it is essential to plan your trades and trade your plan, then sit on profits after. Generally speaking everything between 5680 and 5702 or so is pure chop now. If you over-trade in this zone, you will lose money and the only attractive trades in this situation are typically failed breakdowns, and we saw plenty today below 5680. For tomorrow 5680 remains support. This level is very well tested now and no longer reliable at all now. I won’t be bidding it directly, but if we dip down to 5671 then recover it may be actionable for a final time. As I warned yesterday, we have essentially rallied everyday now since last Wednesday. In this situation , rug pulls can come out of the blue, and it can occur anytime now. It does not mean that we stop taking longs, but it means we should be cautious now until the market “gets it out of its system”. My longs today were only partially sized and any future longs will remain so until a rug pull happens (which is inevitable) and plays out for a deep sell. We do not predict when this will occur, but we are prepared to react. Below 5680 is 5662-64. Once 5680 fails we could easily end up in “knife catch mode” so I am not overly interested in buying supports. If we test 5664 though and reclaim today’s low, it may present an attractive level to level move. If we get a proper dip tomorrow, both 5627 and 5614 would be spots I’d consider small knife catches at. As always, no rush, you can wait to see how price reacts at the zone especially if we are knifing into it at full speed.
• Resistances are: 5696 (major), 5703 (major), 5709, 5720 (Major), 5724, 5734 (major), 5739, 5748, 5754-56 (major), 5765, 5770, 5774, 5781-85 (major), 5794, 5802 (major), 5815, 5829-32 (major), 5840, 5847, 5859 (major), 5865, 5877, 5881 (major). As readers know I don’t short strength in ES so I won’t be shorting any of the above levels (win rate for shorting when bulls control is just too dismal for me even attempt). For those who have a higher risk tolerance than me though, 5734 would be one spot to consider trying shorts.
• Buyers case tomorrow: As I said on Friday buyers remain fully in control and we could easily pullback to 5552 over 100 points lower and it would just be a healthy, normal pullback after this size of rally. When I talk buyers case tomorrow, it is therefore just in the very short-term. For tomorrow, the buyers case would just involve ES filling out the 5702 to 5680 range more. We could ping pong and failed break this down many more times. As long as this structure is in tact though, it is a bull flag and would simply resolve us higher. This would ultimately target 5720, then 5732. If that big resistance can clear, we ultimately head up to 5756, then to re-test the ATH. I normally give spots to add on strength but given this very tight range, I cannot responsibly do this without seeing the action in real time as the zone is too choppy. Perhaps tests of 5680 that recover 5690 may be a concept of interest.
• Sellers case tomorrow: The sellers case here is only short-term obviously, and begins on the failure of 5690. As I say everyday, there is a strong disclaimer that goes with these types of trades. These types of level loss shorts below a support are called breakdown trades. My core edge is failed breakdowns, and the reason is this is an edge is the vast majority of break downs (80%) trap. They take great skill to execute, and even when done well by a trader who has mastered these setups, one should expect over 60% to fail (they are low win rate, high R/R trades. 2 or 3 in a row will fail, then the 4th will pay out huge). *If you don’t like these odds and cant tolerate being trapped - simply don’t take them. I consider breakdown trades to be an advanced setup type so if a newer subscriber, there is nothing wrong with passing on these*. As always I don’t chase. I will warn that this is a very complex short as this is a trappy zone. Unless you are very experienced with this type of entry, do not try this entry and wait for a more established downtrend to form. Since the 5680 level is already fairly well tested, we could just flush it directly. Ideally, I’d want to see some sort of bounce and/or failed breakdown though in that 5671 to 5680 cluster again before trying short. After this reaction, perhaps 5669 would be an entry, but it would have to go below wherever the real time structure is formed after any bounce attempt. Be sure to take profits level to level, as we could very easily just pop down a level then squeeze 60 or 70 points.
In summary for tomorrow: We are chopping ahead of FOMC. My general lean is always to defer to the trend. 5680 to 5703 is a pure chop zone and as long as 5680 holds (or recovers on any traps below) we can work higher to 5720, then 5734. If 5680 fails, ES needs to sell before FOMC (and for buyers, this is the healthiest thing possible).
