Morning Update for Subscribers

Did We Just Witness the Swing Top?

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📢 Morning Update for Subscribers – Did We Just Witness the Swing Top?

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📊 Open Pivots:

• $ES: 5518

• $NQ: 19318

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📌 Overview – Bears Reclaim Control After Overshoot Trap

Yesterday we warned: "Never discount the bears." And today, they showed up exactly as expected.

• 5578 was the critical level—once lost, the 5505 target became a live magnet.

• Prices tagged the overshoot level at 5595, squeezing out the last of the shorts, and then reversed hard.

• At the time of writing, price is trading below 5500, confirming the downside follow-through we forecasted.

This could be the swing top, but as always—price must confirm.

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📌 Current Market Context & Trade Scenarios

✅ Why This Wasn’t a Surprise:

• We identified 5580s as the target and expected overshoot behavior up to 5595.

• Markets often go "too far" before realizing it's too far—a classic tenet of Auction Market Theory.

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📚 Educational Segment – “Too High” and “Too Low” in Auction Theory

🔍 Auction Market Theory (AMT) teaches that markets are a constant negotiation between buyers and sellers. Price is always probing to find value.

• When prices trade too high, it attracts sellers.

• When prices trade too low, it attracts buyers.

• The extreme of either move—what we call an “excess”—often marks a turning point.

✅ Application in Current Market:

• The 5595 high was an excess auction—buyers exhausted themselves chasing the rally, setting up a trap.

• Once sellers stepped back in below 5578, they regained initiative and controlled the tape.

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📌 Key Levels to Watch Today

🔻 Downside Support Zones:

• 5505 – Hit already, key pivot early in the session.

• 5473-5484 – Next range of support, possibly reactive.

• 5420 – Reclaim level for bulls and long-term battle zone.

🚀 Upside Reclaim Zones:

• 5530 – First area of short-term control.

• 5578 – Reclaiming this level negates the bear thesis and reopens the path to 5595–5630.

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🛠 Trading Plan – Stay Objective and Patient

📌 Scenario 1: Consolidation Above 5505

• Watch for attempts to base above this zone.

• Could lead to a grind higher back into 5530–5540 zone.

• Bias remains bearish unless price reclaims 5578.

📌 Scenario 2: Continued Breakdown

• Holding below 5505, and especially 5484, opens the door to 5420 and potentially lower.

• Expect lower highs and failed bounces if sellers stay in control.

📌 Scenario 3: Bear Trap Reversal

• Price dips below 5480s, then quickly reclaims 5505 with strong buyers stepping in.

• Could signal that this move was just a flush and buyers want another go at the highs.

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💡 Final Thoughts – Trading the Market We Have

• What we witnessed was a classic Auction Market behavior:
  Push too high → Trigger excess → Reverse hard.

• It's easy to get emotional at extremes. But we must remain analytical:

  • Where are we in relation to value?

  • Are we too high or too low in the context of the auction?

  • Is the market accepting or rejecting this level?

✔ Trade the context, not just the candles.

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🚀 Stay nimble. Focus on confirmation. Let the market reveal the path.

#MorningUpdate #AuctionMarketTheory #ES #NQ #FuturesTrading #TradeSmart

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