Morning Update for Subscribers
Holiday Dip, But Market Shows Reversal Strength
📢 Morning Update for Subscribers
Holiday Dip, But Market Shows Reversal Strength
📊 Open Pivots:
$ES: 6034
$NQ: 21971
🧭 Market Overview
The holiday session saw a dip of over 1%, as prices slid lower, testing support. However, critical support at 5970 held almost to the tick, signaling that buyers were still engaged. Since then, we’ve seen a reversal, and prices have bounced back, moving into positive territory.
The key technical levels are starting to make themselves clear again. The 6034 resistance on $ES and 21971 on $NQ were initially tough support levels before the dip, and now that the market has reclaimed them, buyers are back in control.
If prices hold above these levels, targets are now back on the upside:
$ES: 6070
$NQ: 22149
Sellers, however, are on the defensive, as failure to reclaim 6034 on $ES and 21971 on $NQ will risk further squeezes higher.
📚 Auction Market Theory Insight – Rollover Dynamics and Market Structure
As the June contracts expire, the focus shifts to September — with December contracts becoming the back month shortly after.
Futures rollover occurs when market participants shift from expiring contracts to active ones. This process can lead to:
Volatility and Liquidity Shifts: As traders adjust positions, markets may experience heightened volatility, especially as contracts approach expiration.
Pricing Discrepancies: Prices between active and expiring contracts may diverge due to supply/demand shifts. This divergence can create short-term imbalances and potential opportunities if properly monitored.
Market Structure Transitions: During rollover, the market might experience a temporary slowdown in momentum. The transition between the expiration and the new front month contract can lead to false breaks or unusual price action as liquidity adjusts.
For traders, it’s key to stay nimble during rollover periods. Liquidity tends to be lower in outgoing contracts, and big players may wait until the new active contract takes over, leading to an increase in volume and potential trend shifts.
🎯 Key Levels to Watch
$ES:
Resistance: 6034 → reclaim opens 6070
Support: 5970 → dip buy zone
Trend: Bullish above 6034, focus on 6070 as next target
$NQ:
Resistance: 21971 → critical level for trend continuation
Support: 21676 → dip buy zone
Trend: Bullish above 21971, aim for 22149
📖 Educational Cue – Futures Rollover Insights
Futures rollover plays an essential part in managing your timing and risk. When the current month contract expires, traders must move positions into the next active contract. This shift can create a small window of distortion in pricing and market behavior.
Here’s how you can interpret this:
Short-term movements may be amplified as new contracts start to adjust to price discovery.
Watch for pricing discrepancies between the expiring and the new contracts. This is particularly true when moving from the current front-month contract to the next.
Rollover can cause choppy price action, so ensure you don’t chase movements without first evaluating the stability of the new front-month market.
Understanding rollover risk can help you maintain your edge, especially if you’re looking to take positions based on long-term trends and stability.
🔚 Final Execution Cue
We’re still in a bullish structure, but sellers must reclaim 6034 on $ES and 21971 on $NQ to prevent further squeezes.
Keep an eye on the September contracts as we get closer to the official rollover. Positioning ahead of the rollover can be key, so remain vigilant.
📌 Stay focused on price action and contract changes over the next few days as we transition into a new market phase.
📌 Final Thoughts – Structure Leads, Timing Wins
Prices are near breakout territory, but the key levels are still in play. Buyers need to hold above 6034 and 21971 to continue to target the upside. If we slip below those, we’re back to neutral at best — with a risk of more downside.
Keep an eye on the rollover dynamics and respect the levels as liquidity can get skewed during this period.