Morning Update for Subscribers
The Retrace After the Squeeze
📢 Morning Update for Subscribers – The Retrace After the Squeeze
⚙ Open Pivots:
$ES: 5625
$NQ: 19833
As expected, prices failed at 5697—our long-standing key level—and the result has been a clean reversal. This morning’s Open Pivots are significantly lower than yesterday, giving us a clear signal that the market structure has shifted overnight.
At the time of this post, $ES is trading near 5625, having already tested the globex low of 5616, which will act as initial support. A clean break and hold below opens the path toward 5571, a critical zone from last week that triggered the squeeze above 5700.
📌 Key Levels for Today
Downside Support:
5616 (Globex low) – First line of defense
5571 – Key squeeze trigger from prior rally
5502 – Larger swing support if sellers stay in control
19296 ($NQ) – Next big downside target over 1–2 weeks
Upside Resistance:
5631 – Globex midpoint; a reclaim shifts short-term control
5697 – Major decision level; the rally-killer
5724 – Last week’s breakout level; must reclaim to shift bias
📚 Educational Focus – “What Happens After a Squeeze?”
A market squeeze (like the one that broke above 5700) is often not sustainable unless supported by new buying. When it isn’t, we get a classic retracement—a move back through the key levels that acted as stepping stones on the way up.
Here's the process:
Market rallies hard through resistance levels – typically caused by short covering and panic buying.
Price overextends and then fails to build value or consolidate above breakout zones.
Buyers exhaust, and price begins to rotate back down, often retesting the same levels it broke through.
If sellers show strength at these prior support-turned-resistance levels, a full unwind or reversal occurs.
🧰 How-To: Prepare for Trend Day Down
If today is a Trend Day Down, here’s your game plan:
✅ Identify “Fail Points” – Levels like 5631 where price tried to reclaim but failed. These can become short entries.
✅ Watch Structure Breaks – Once 5616 breaks, look for momentum-based entries toward 5571.
✅ Avoid Fighting the Tape – Don’t try to long every dip. Instead, let the trend prove it’s weakening before looking for reversals.
✅ Trail Profits on Shorts – If in a winning trade, reduce size near key levels (e.g. 5571) and trail remaining positions.
🧠 Mental Model: Big Risk = Big Opportunity + Big Danger
When uncertainty is high, both bulls and bears can be wrong—and often violently. The right mindset here is to:
Focus on execution at defined levels
Manage risk tightly, especially size
Respect trend alignment; don’t fight direction until it shifts
Accept that being flat is a position, especially during volatility clusters
🔍 Final Thoughts
Bias is now tilted bearish, but sellers must hold below 5631 to confirm strength.
A squeeze back above 5697 would unwind the bear case quickly—keep your ego out of it.
We're now in “watch for exhaustion” mode, as the market decides whether the squeeze rally was temporary relief—or the real deal.
Stay sharp, stay flexible. You don’t need to predict the future. Just follow the map.
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