Power Hour Update for Subscribers
Day 3 of the Rally: Exhaustion or Continuation?
📢 Power Hour Update for Subscribers – Day 3 of the Rally: Exhaustion or Continuation?
📊 Power Pivots:
$ES: 5905
$NQ: 21351
Today has been defined by range-bound price action, with the notable exception of $NQ tagging 21405, one of our anticipated resistance levels. That touch marks a key pivot in sentiment as we close out the session.
This is Day 3 of the rally effect, and historically, Day 3 tends to exhaust momentum. While the broader uptrend is intact, we’re now entering the zone where traders begin taking profits and probing for weakness.
📌 Key Inflection Zones:
$ES
✅ Bullish Continuation Above: 5901
❌ Short Trigger Below: 5915 → Failure to reclaim can initiate reversal
🔻 Bearish Momentum Below: 5877 → Opens door to 5829
$NQ
✅ Bullish Above: 21300
❌ Short Trigger Below: 21270
🔻 Bearish Momentum Below: 21149 → Key breakdown target
🎯 Trade Triggers & Scenarios
📌 Scenario 1: Inside Day Continuation
If price holds above Power Pivots (5905 / 21351), the slow grind may continue into tomorrow.
A close above 5901 confirms buyer control into the weekly close.
📌 Scenario 2: Reversal Setup – 3rd Day Fade
Don’t buy Day 3 of a rally — a classic rule in trend exhaustion.
Look for weakness at 5915 ($ES) or failure at 21300 ($NQ) for short entries.
Target 5877 and 21149 on breakdowns.
📌 Scenario 3: Failed Breakout → Trap
NQ tapping 21405 may have trapped longs. If we fade below 21300 with speed, it confirms the exhaustion.
📖 Market Education – Understanding the “3rd Day Rule”
In Auction Market Theory and classic trend analysis, Day 1 establishes direction, Day 2 confirms it, and Day 3 often exhausts it.
Why?
Late entrants are forced to chase at elevated prices.
Smart money begins taking profits.
Liquidity dries up and volatility increases, creating trap risk.
✅ The key? Don’t initiate longs into Day 3 highs unless you see signs of fresh accumulation or breakout volume.
⚠ Final Notes
We’re seeing a compression day on the back of a strong move.
Close above 5901 suggests more upside continuation.
Failure under 5915 / 21270 says the fade is on and bigger pullbacks could come fast.
Watch for reversal signals into the close. Trap risk is high.
#PowerHour #AuctionTheory #FuturesTrading #ES #NQ #TradeSmart