ES Trading Plan for CPI Day Oct 11thSupports:
• Major: 5822-24, 5805, 5795, 5747-51, 5730, 5711, 5703, 5691, 5675, 5665, 5646
• Minor: 5828, 5815, 5810, 5790, 5780, 5773, 5764, 5757, 5740, 5725, 5715, 5686, 5682, 5672, 5657
What I’m Watching:
•Tomorrow is CPI day. We’ve seen a massive rally from Thursday’s lows, breaking out of a two-week bull flag. However, as I’ve said, this isn’t the ideal time to trade.
• Post-rally setups are scarce. Long entries are risky because we’ve already had 15+ tests/failed breakdowns of support, and now we’ve moved significantly higher. If you didn’t enter early, it’s not a great time to force trades. Shorts are also risky as we’re still in a bull market and at all-time highs (ATHs).
• To make matters more complicated, tomorrow is CPI day, which is historically volatile, trappy, and unpredictable. For great traders, capital preservation is always key, so many avoid trading right after CPI releases. My focus tomorrow is protecting profits, and any trade will risk only 20% of my recent gains.
• CPI days often see massive moves (70+ points either way), so keep expectations flexible. The primary task for buyers will be to defend today’s bull flag breakout at 5795. If we get a CPI flush, buyers will want to defend 5795 or reclaim it quickly. Be cautious, especially below 5795. Many levels below have been heavily tested, so if 5795 breaks, we could see a rapid move lower.
• If we test 5795 and reclaim 5805, or if we flush 5790 and recover 5795, those could present long entries, especially if accompanied by volume confirmation. Be patient with entries tomorrow, and remember that breakdowns are often traps.
Resistances:
• Major: 5847, 5862, 5881, 5890, 5897, 5923, 5950-55, 5970
• Minor: 5840, 5852, 5855, 5869, 5876, 5904, 5908, 5917, 5932, 5936, 5941, 5965
• As a rule, I don’t counter-trend short ES in a bull market. I haven’t taken a short loss in nearly 2 years because I don’t fight ES in uptrends. However, for those interested in counter-trend shorting, 5881 and 5897 are levels where you might find some resistance.
Buyer’s Case for Tomorrow:
• Straightforward: We’ve broken out of a bull flag at 5795, and tomorrow buyers will need to defend it. If CPI causes a flush, we don’t want to see any significant move below 5795, or if it does break, buyers need to reclaim it quickly. As long as this zone holds, we remain in an active bull flag breakout, and the target becomes 5862, 5881, and 5890-97. Clearing that range opens the path to 5950-55 and potentially 6000.
• I wouldn’t recommend adding longs after a 100+ point rally on a CPI day, but in a normal scenario, flagging below today’s highs or above 5822 would be considered bullish. Watch for volume to confirm these entries if so.
Seller’s Case for Tomorrow:
• Sellers’ case begins with a failure of 5795. After such a significant rally, a correction wouldn’t necessarily be bearish in the big picture, just a healthy pullback. However, for short-term trades, losing 5795 is critical.
• Breakdown trades require a specific setup. I need to see a test or a failed breakdown first, which helps remove demand from the level. Once this happens, I’ll look to enter slightly below the structure. For example, a test of 5795 or 5805, followed by a failed breakdown, would be the signal to short, likely triggering around 5792. On CPI days, though, this pattern might not materialize and the market could simply flush without providing the structure.
Summary for Tomorrow:
• It’s been a great run, so I’m shifting to profit protection until CPI passes. Anything can happen tomorrow, but I lean toward following the trend and trading based on what’s in front of me. We’ve broken out of a bull flag at 5795, and as long as that holds, targets include 5863, 5881, and 5890-97. If 5795 fails, it means today’s breakout has failed, and sellers could take control.
Follow for updates every morning at 8:15 Eastern on TradingView
