Morning Update for Subscribers

Market Clings to Trade Hopes While Macro Risks Loom

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📢 Morning Update for Subscribers – Market Clings to Trade Hopes While Macro Risks Loom

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📊 Open Pivots:

• $ES: 5700

• $NQ: 20220

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🧭 Market Overview

Markets continue to defy gravity—not because of healthy internals, but due to ongoing "trade talks are going well" headlines. While optimism headlines provide temporary buoyancy, underlying conditions continue to worsen.

Supply chains are not magically restocked by words. The disconnect between sentiment and logistics grows daily. If not resolved quickly, we’re headed for COVID-style supply shocks, especially in essentials and durable goods.

Remember the toilet paper crisis? Prices rose not from demand, but from hoarding due to fear of shortage. We're seeing early signs of a similar pattern emerging. Inflation risks are being masked by positive narratives—but they’re building beneath the surface.

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📌 Key Market Structure & Bias Levels

We called 5738 as the anticipated market top, and it delivered with an immediate 80-point pullback after printing a high of 5741. That minor tick above the level? A signal that buyers want more—likely 5780s next.

Price bounced overnight after hitting Level 1 pullback support and continues to hold above the critical 5691–5706 range. This range is now our control zone, and it’s the key to today’s directional decision-making.

Key Intraday Zones to Watch:

• Resistance: 5715 → 5738 → 5781

• Support: 5691 → 5665 → 5620 → 5592

• Midpoint/Bias Level: 5706

Expect sellers to attempt short entries at 5715. If buyers flip this, they’ll likely attempt another breakout over 5738. The price action hints at a return to August’s trading range, setting up both fade and trend trades.

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📌 Trade Setup Scenarios

🚀 Long Setup:

• Trigger: Price holds above 5706 with confirmation (strong 5m bar closes, volume uptick)

• Target Zones:

  • 5741: Previous high

  • 5781–5850: Measured move continuation

• Invalidation: Break back below 5691

🔻 Short Setup:

• Trigger: Failure at 5706 with exhaustion near 5715 or rejection wick at 5738

• Target Zones:

  • 5665: Minor support zone

  • 5620–5592: Bearish continuation

• Invalidation: Break and hold above 5741

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📖 Educational Insight – Trading the "Narrative Disconnect"

When narratives (like "trade talks going well") dominate headlines but don’t align with real-world data (like supply chain strain or inflation risks), traders must adapt.

Here’s how to protect yourself:

1. Price > Headlines: The market listens to price more than news. If a headline rallies price but sellers absorb and reverse it, that’s the real signal.

2. Don’t Fade Without Confirmation: Wait for failure at resistance (e.g., 5715 or 5738) before shorting. No need to catch the exact top—just be on the right side when it turns.

3. Respect Support Until It Breaks: 5691–5706 is buyer-controlled unless sellers flip it. Don’t preempt the breakdown—wait for evidence.

4. Watch RTH Midpoints: They act as the battlefield between intraday bulls and bears. Today that level is 5697—control it, control the session.

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🔚 Final Thoughts – "Too High" or "Too Low" Is Only Obvious After the Move

Markets must go too high before it’s obvious they’ve gone too high. Same for lows. This is Auction Market Theory in action—price explores until it finds imbalance.

Right now, the market has explored higher. Whether it rejects or accepts these prices will determine our next major move. Until then, stay nimble, respect key levels, and don’t argue with price.

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#FuturesTrading #ES #NQ #MorningUpdate #MacroNarratives #PriceAction

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