Morning Market Update for Subscribers
Weak Overnight Session After Yesterday’s Breakdown
📉 Morning Market Update for Subscribers
🔻 Weak Overnight Session After Yesterday’s Breakdown
Markets continued their downtrend, with $ES closing below 5895, confirming more downside momentum. The overnight session (Globex) has been relatively weak, bouncing from 5850s after testing our next key downside levels.
The question for today: Will we see a relief rally, or does the selling continue?
📊 Market Overview & Open Pivots
🔹 $ES Open Pivot: 5888
🔹 $NQ Open Pivot: 20601
🔻 Downside Levels – Key Supports to Watch
📍 5850 ($ES) – Initial Bounce Zone
Prices dipped to 5850s overnight and bounced, but the strength of this recovery is still questionable.
If buyers fail to reclaim key resistance zones, another flush to 5823 could be on the table.
📍 5823 ($ES) – Major Support Level
This is the next critical demand zone below 5850.
A break and daily close under 5823 opens the door to further selling pressure.
📍 20500 ($NQ) – Key Psychological Support
Nasdaq continues to lag and is now at critical long-term support levels.
A failure to hold 20500-20475 could bring a rapid move down to 20300.
🚀 Upside Potential – Relief Rally Levels
✅ 5869-5884 ($ES) – Must Hold Zone for Bulls
For a relief rally to materialize, $ES must hold this zone.
A break below increases the probability of another drop to 5823.
✅ Relief Rally Target: 5962 ($ES)
A move toward 5962 remains valid if we start seeing 30-minute bar closes above 5878.
This level aligns with prior liquidity zones where sellers could reload shorts.
✅ 20900-20950 ($NQ) – Resistance Zone
A bounce into this area could meet strong selling pressure.
If rejected, expect another leg lower.
📚 Market Education: Understanding Drop & Pop Setups
🔍 What is a Drop & Pop?
A "drop & pop" pattern is when price sweeps key support levels, traps sellers, and then reverses higher into resistance zones.
📝 How to Trade It?
Look for a quick flush below key support (like 5869-5884)
Watch for absorption and aggressive buying to step in
Confirmation: If price reclaims the breakdown zone, look for a move toward 5962
🚨 Warning: If price fails to hold 5869-5884, the relief rally could be invalidated, leading to a deeper flush toward 5823.
📍 Final Thoughts – Key Levels for Today
✔ Upside scenario: If 5869-5884 holds, watch for a push toward 5962 resistance.
✔ Downside scenario: A failure to hold 5869-5884 increases risk of a drop toward 5823.
✔ Key resistance: 5895 and 5915—these need to be cleared for bulls to gain traction.
📌 Plan your trades accordingly and stay patient—momentum remains bearish unless proven otherwise! 🔥