April 2 ES Levels and Gameplan
We continue to let our runner run...
Yesterday afternoon, I noted the 3 trades taken on ES.
1 small loss.
2 big wins.
Here’s what the chart looked like:
If you missed yesterdays trade review you can find it here:
April 1 Recap - The Two Hr Rally That Continues To Pay Us
As we roll into this AM we’re seeing ES selloff a bit from the 5696 high.
Yesterday I noted looking for a 99 high and we fell just before that point. I said during our trades, after T1-T3 was hit:
This is what building structure looks like before the next leg.
Here’s what we look like this AM on a 30 minute:
As you can see, 5620 is a MAGNET
Something I’d like to point out I said yesterday that I repeat this AM…
In between the purple lines, you’ll see the words
“Critical area that much hold for bull hope”
Interesting to see the low Monday at 8 and 9PM bounce from there and again this morning.
That is the reason we:
Leave critical areas on the chart (for a period of time)
Use critical areas as odds enhancers if we have additional support.
This is the staple example of a “price magnet” or when support turns into resistance or vis versa. We typically can see price use these areas 4/5 times before we move away from the level.
This is the 4th use here this AM. We saw the price consolidate and break the level Friday at 3PM. As ES found a bottom at our 5545 entry and took off, we tested the lower bound yesterday (after the morning rally) at around 1PM. Then we used it as support again at 9PM and now at 7AM.
We continue to use 5620 as a magnet.
We stopped out of our runners from yesterday’s trades during this morning’s selloff at 5620.
Recap:
-FBD 5618 1st attempt - lost 8 points
-LTB 5606 - T1 5612(70%), 5624 T2 (10%) ,5649 T3 hit (5%). Stop at BE (15% runner. Stopped at 5620 this morning).
-5618 2nd attempt - 26—5624 T1 (70%), 5632 T2 (15%), 5649T3 hit (5%). Stop at BE (10% Runner. Stopped at 5620 this morning)
Let’s see what today brings us and if this selloff this morning continues or if we can expect additional bounce.
Here’s Where We’re At:
ES Scoreboard
I spend most of my day examining ES and finding lines of support and resistance and have those marked on my chart as areas of interest. They are the same levels I share with ESDaily readers in the section below.
My job isn’t to predict where price is going:
It’s to take Grade A+ setups, and get out when I’m told I’m wrong.
The end result on this “idea” comes from our Core Strategy here:
#1 No more than 5% risked on any single position. Non negotiable.
#2 Nothing less than a 1/1 reward to risk for T1. Non negotiable
#3 I do not get to decide where Targets are. It’s just shy of next level resistance
#4 60-75% of contracts are to be taken at T1
#5 10-15% of contracts are to be taken at T2
#6 Always leave a runner if permitted
#7 Limiting number of trades
Above outlines the “reasons” we’re able to capture gains quickly. We have no idea where price is going next, our job is to take great setups, take profits quickly, and scale out.
Im including the below because I think it’s critical to understand where we came from and where we may run into issues if we get back up there. I’ve harped on the ES Major Inflection point for some time now and I’ve still got that area top of mind.
Note from March 26 newsletter:
We now have two signs that a pullback may be coming
#1 The Negative Divergence indicated on the chart in pink lines. We have a higher high in price Monday at 3PM and lower momentum on the RSI.
#2 So far, we’ve failed to breach the 5836.50 high from 8PM last night.
We look to all the technicals and I’m literally 50/50 that we’re going to see another pullback, VS this being a continuation and we move above. Higher time frames suggest pullback, lower time frames suggest continuation.
As noted in 3/26 letter, we got it.
Here’s March 26
We look to this area, that brought the selloff. After we attempt on bounces, I’m eyeballing this as the most critical area to the upside on the chart.
***New Reader’s Please See This Area***
Core strategy, rules - Rules are important in all aspects of life, but never more important than in the life of a trader. The objective is to use the areas we find as turning points, as we seek liquidity…. and trade with institutions. If you’re new to ES Daily, you can find our core strategy outlined here where I detail out the type of setups we look for here at ES Daily: https://theesdaily.substack.com/p/es-dailys-core-strategy
Here’s the news data that may matter this week:
Not much in the way of news to break us out of this one way or the other this AM but we do have a solid week of news:
Wednesday April 2: ASP Non Farm Payrolls 8:15AM EST
Thursday April 3: Unemployement Claims 8:30EST & ISM/PMI 10AM EST
Friday April 4: Average Hourly Earnings Non-Farm Employment ChangeUnemployment Rate 8:30AM
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