Power Hour Update for Subscribers
More New Lows – What Comes Next?
🚨 Power Hour Update for Subscribers
🔍 More New Lows – What Comes Next?
📊 Market Overview & Power Pivots
📌 Power Pivots:
🔸 $ES: 5540
🔸 $NQ: 19315
✅ Key Observations:
Prices dipped again and made new lows today, extending the ongoing sell-off.
A daily close below 19300 ($NQ) could trigger a much larger drop toward 18300 next.
A close below 5575 ($ES) is another bad sign for the market and increases the risk of a deeper correction.
Shorting at new lows can be tricky—watch for potential short-covering rallies before another leg down.
📚 Market Education: Understanding Short-Covering Rallies
🔍 What is a Short-Covering Rally?
A short-covering rally occurs when traders who are short start closing their positions, causing a sharp, temporary move higher. It’s not a true reversal, but rather a forced buying event as traders exit shorts.
🔹 How to Spot a Short-Covering Rally?
1️⃣ Rapid price spike off the lows – often happens late in the session.
2️⃣ No real follow-through buying – price may stall at key resistance and fail to continue higher.
3️⃣ Volume increase at the lows – shorts rushing to exit can create a temporary demand spike.
🔹 Why This Matters?
If price bounces sharply after making new lows, it could be a trap for shorts trying to chase the move lower.
If the bounce lacks conviction and fails at resistance, the next drop will likely be stronger.
🔑 Key Levels & Trading Plan
🚀 Bullish Scenario – Short-Covering Rally & Relief Bounce
✅ Key Upside Resistance Levels:
5575 ($ES) / 19480 ($NQ) → First resistance.
5615-5630 ($ES) / 19600 ($NQ) → Major resistance and potential short re-entry zone.
🔹 How to Trade It:
If price bounces off the lows and stalls at these levels, sellers may look to re-enter shorts.
A daily close above 5630 ($ES) and 19600 ($NQ) would be needed to consider a larger bottoming attempt.
🔻 Bearish Scenario – More Downside & New Lows
🚨 Key Downside Levels to Watch:
5530 ($ES) / 19250 ($NQ) → Immediate support.
A break below opens the door for a slide to 5500 ($ES) and 19000 ($NQ).
A daily close under 19300 ($NQ) could lead to a larger breakdown toward 18300.
🔹 How to Trade It:
If price fails at resistance (5575 / 19480) and rejects with strong selling, the downtrend is still intact.
A daily close below 5530 ($ES) and 19250 ($NQ) confirms more downside ahead.
📌 Final Thoughts – What to Watch Into the Close
✔ The trend remains bearish, but expect short-covering rallies.
✔ Shorting new lows is risky—watch for quick bounces before re-entering shorts.
✔ A close below 5575 ($ES) and 19300 ($NQ) confirms further downside risk.
✔ If a bounce lacks follow-through, sellers will likely re-enter aggressively.
🔎 Be patient, watch for traps, and let price confirm direction before making aggressive plays!
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