Morning Market Update for Subscribers
Market Overview: A Deepening Sell-Off or a Potential Reversal?
📢 Morning Market Update for Subscribers
📅 Market Outlook & Key Trading Levels
🔍 Market Overview: A Deepening Sell-Off or a Potential Reversal?
Markets continued their downward trajectory, making new yearly lows overnight. The key question remains—do buyers finally step in, or is this a sign of deeper economic troubles ahead?
Yesterday’s price action was significant. Despite another major drop, prices did not close at their session lows. Instead, a small relief rally formed, which was expected after such an extended move down. However, this relief was short-lived as the market printed fresh lows overnight.
Now, we turn our attention to whether buyers can reclaim control or if this remains a structured move toward much lower price levels.
📊 Market Overview & Open Pivots
🔸 $ES Open Pivot: 5820
🔸 $NQ Open Pivot: 20314
These pivots represent the intraday balance points where bulls and bears will battle for control.
📌 Key Levels to Watch
📈 Upside Potential – Can Buyers Reclaim Control?
✅ 6050 ($ES) – The Unfinished Business
This remains a key upside target if buyers can step in and stabilize the decline. A relief rally could aim toward this level, but without momentum, it may just be another opportunity for sellers to step in again.
✅ 5850 ($ES) & 20405 ($NQ) – First Sign of Buyers?
Any bounce today will need to hold above these levels for buyers to gain traction.
A sustained move above 5850 on ES and 20405 on NQ could signal a short-term bottom forming.
🎯 Upside Targets if buyers reclaim support:
5885-5915 ($ES) → First resistance zone
20650-20800 ($NQ) → Resistance before any real trend shift
📉 Downside Risks – The Bearish Case Intensifies
🔻 5784 ($ES) & 20250 ($NQ) – The Election Breakout Levels
These are historical breakout zones from the 2020 election rally. If price trades below these levels, it could trigger a cascading move lower.
🔻 5720 ($ES) & 19300 ($NQ) – The Next Big Liquidity Zone
If buyers fail to step in here, the market could enter a serious breakdown phase.
A daily close below 20300 on NQ would be a major bearish signal and could set up a trade targeting 19300.
📍 Downside Targets if momentum accelerates:
5784 ($ES) → Key structural level from 2020
5720 ($ES) → A significant liquidity pool for institutions
19300 ($NQ) → The next major support if 20250 fails
📚 Market Education: Recognizing a Structural Market Breakdown
When markets reach new yearly lows, the natural inclination is to look for a bounce. However, not all sell-offs are created equal. There’s a big difference between a temporary dip and a true breakdown.
📌 How to Identify if This is a "One-Off" Sell-Off vs. a Structural Breakdown?
🔹 Key Signs of a Temporary Dip (Potential Rebound Setup):
✔ Selling Exhaustion – If sellers fail to push price lower on new lows, it may indicate exhaustion.
✔ High Relative Volume at Lows – If price stabilizes on increasing volume, it suggests buyers stepping in.
✔ Trapped Shorts – If a rally holds above resistance (5850/20405), short sellers may be forced to cover, fueling upside.
🔻 Key Signs of a Structural Breakdown (More Selling to Come):
❌ No Strong Bounces – If price continues making lower highs and lower lows, it suggests continued weakness.
❌ Failure at Major Support Zones – Losing 5784 ($ES) & 20250 ($NQ) would confirm deeper downside.
❌ Weak Closing Structure – If daily candles close near the lows, expect continued downside pressure.
🔎 Trading Plan & Scenarios
📍 Scenario 1: Relief Rally Setup
If 5850 ($ES) & 20405 ($NQ) hold, expect a bounce attempt.
Confirmation requires a strong close above 5915 ($ES) and 20650 ($NQ).
Target: 6050 retest if momentum builds.
📍 Scenario 2: Breakdown & Continuation Short
If prices break below 5784 ($ES) & 20250 ($NQ), expect accelerated selling.
Watch for a flush down toward 5720 ($ES) & 19300 ($NQ).
Target: Major liquidation zones below 5700 ES and 19300 NQ.
📍 Scenario 3: Chop & Indecision
If price remains between 5784-5850 ($ES) & 20250-20450 ($NQ), expect a grind day.
Likely a positioning day for a larger move tomorrow.
📌 Final Thoughts – A Decisive Moment for the Market
✔ Buyers need a strong defense of 5784 ($ES) and 20250 ($NQ).
✔ A daily close above 5995 would signal a potential bottoming process.
✔ A daily close below 20300 increases the risk of a freefall to 19300.
✔ Stay nimble—this is a high-volatility environment with fast moves in both directions.
🔎 Today is all about watching how buyers respond to key support levels. If they fail to hold, expect another wave of downside selling into deeper liquidity zones.
💡 Be patient, trade the levels, and let the market tell us where it wants to go.
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