Morning Update for Subscribers
Knee-Jerk or Reversal? What This Bounce Might Really Be Telling Us
📢 Morning Update for Subscribers
🧠 Knee-Jerk or Reversal? What This Bounce Might Really Be Telling Us
📊 Market Overview & Open Pivots
🔹 $ES Open Pivot: 5632
🔹 $NQ Open Pivot: 19372
Markets kicked off with one major question:
Is this bounce a “knee-jerk reaction”… or will it grow legs and squeeze higher?
Yesterday’s bounce off the lows was violent — and that type of rally is both dangerous and revealing. It tells us something important:
👉 When prices make new lows or highs, that’s where traps and reversals are born.
$NQ hit fresh 2025 lows, and that was likely the trigger for the short-covering frenzy.
Remember:
Last lows = life-ending for shorts
Last highs = life-ending for longs
📌 Key Trading Lessons – Understanding Traps and Timing
After the dip… comes the rally.
After the rip… comes the fade.
It’s not a question of if, it’s a question of when.
Your edge lies in observing when:
✅ Price hits a level
✅ Reversal wicks start forming
✅ Candle closes confirm rejection or acceptance
✅ Key levels break… or hold
That’s why we use levels to locate the trade and price action to time it.
📈 Key Levels & Trading Plan
🔺 Upside Bias Triggers
$ES: 5658
$NQ: 19500
Holding above these levels opens the door to a squeeze much like last time.
Note: The last time we hit 2025 lows, $NQ rallied 1500 points in 2 days. Don’t sleep on the power of a trend reversal.
🔻 Downside Breakdown Triggers
$ES: 5610
$NQ: 19300
If these levels give way, expect a grind lower — maybe even more attempts to test the 19000s and below.
🎯 Next Levels to Watch:
Upside Targets:
$ES → 5675 → 5718
$NQ → 19680 → 19870
Downside Targets:
$ES → 5575 → 5535
$NQ → 19220 → 19000 → 18800
📚 Market Education: Why Volatility Feeds Reversals
When markets get too stretched — either bullish or bearish — it creates imbalances.
Too bearish? A single spark can ignite massive short covering.
Too bullish? A single crack can collapse the floor beneath longs.
That’s why the largest up moves happen in bearish trends, and the largest drops happen in bull trends.
They’re not contradictions. They’re resets — and they happen fast.
👉 Always ask yourself: Is this market about to trap?
🔍 Final Thoughts – Today’s Game Plan
Stay alert near 19300/$NQ and 5610/$ES — those are your trap zones.
Above 5658/$ES and 19500/$NQ, expect upside acceleration.
Below 5610/$ES and 19300/$NQ, prepare for a slow drip back to the lows or a breakdown continuation.
The market may be faking out weak hands, building energy for a major move.
Watch the close of 30-minute and 1-hour candles for confirmation.
Stay nimble, follow the levels, and let the market show its hand.
We’re in prime reversal territory — or setup for another leg down.