Morning Update for Subscribers
Spot-On High Call at 5525 – Will Sellers Follow Through or Get Squeezed Again?
📢 Morning Update for Subscribers
🔍 Spot-On High Call at 5525 – Will Sellers Follow Through or Get Squeezed Again?
📊 Market Overview & Open Pivots
The market followed through on yesterday’s massive rally—but just as we expected, a pullback arrived overnight, with prices dropping roughly 2% off the highs. Our 5525 sell zone nailed the top again, showing how valuable strong level-based trading can be in volatile environments.
Still, volatility appears to be trending downward, a common feature after high-momentum days. That trend, however, can easily reverse during today’s cash session, especially if bears show signs of exhaustion or bulls ignite a short-covering rally.
🔹 $ES Open Pivot: 5387
🔹 $NQ Open Pivot: 18847
Opening just below these pivots puts a slight bearish bias into play for now. The next few hours will confirm if this pullback is controlled rotation or reversal risk.
📌 Key Inflection Levels to Watch
Downside Support (Bearish Targets):
$ES 5378 – First major support. Must break to reassert downside.
$NQ 18800 – Similar to $ES, needs to break and hold to confirm sellers in control.
Further Targets:
$ES 5324 → 5250 → 5070
$NQ 18520 → 18100 → 17600
Upside Resistance (Bullish Traps & Squeeze Zones):
$ES 5443 → 5525 – Yesterday’s ceiling and potential seller reactivation zones.
$NQ 19100 → 19420 – Watch for sharp rejections if tested.
📈 Trading Scenarios for Today
Scenario 1: Controlled Pullback
If 5378 ($ES) and 18800 ($NQ) hold, we may see a pop and retest of 5440–5525.
Likely outcome if volume dries up and sellers fail to press advantage.
Target: 5525 → 5590 → 5640 before next short setup.
Scenario 2: Reversal Continues
Clean break and hold below 5378/18800, confirmed on 15m–30m candle closes.
Signals rally was just a squeeze, not sustainable trend shift.
Targeting 5250 ($ES) and 18100 ($NQ).
Scenario 3: Bull Trap Snapback
Reclaim of Open Pivot (5387/18847) followed by rejection at 5443.
Indicates false bounce, especially if breadth weakens.
High-probability reversal short setup.
📚 Educational Insight: Trend Strength Shifts
📌 Downtrend Phases:
Strong Downtrend: Fast, unrelenting drops with few bounces.
Moderate Downtrend: Includes sharp rallies, but sellers still dominate.
Weak Downtrend: Ranges expand and chop increases—watch for trend shifts.
We’ve transitioned from strong to moderate downtrend. It doesn't mean the bottom is in. These rallies are part of the process, and until we reclaim key higher timeframe structure, new lows are still possible.
📌 Why Volatility May Be Contracting
After massive moves, the market typically consolidates as it absorbs the recent extremes.
This sets up compression-breakout scenarios where tight ranges suddenly erupt into new legs—either up or down.
🛠 Final Thoughts
Volatility remains, but with fewer extreme ranges—adjust your trade size accordingly.
Sellers must defend 5378/18800 or risk being steamrolled again.
Bulls can reclaim control only above 5525, but even then it’s a countertrend rally unless higher timeframes flip.
Stay nimble and watch for headfakes at key zones—this market rewards precision and punishes overconfidence.
🚨 Risk remains elevated—don’t get complacent.
Let the market tip its hand before you strike.