🚀 PPI Reaction & Key Levels
– Can Bulls Hold the Gains?
📈 Morning Update for Subscribers
🚀 PPI Reaction & Key Levels – Can Bulls Hold the Gains?
Good morning, traders!
After yesterday’s bear trap and rally, the overnight session showed relative strength in $NQ while $ES lagged behind. The Producer Price Index (PPI) data gave the market an initial bullish reaction, pushing prices higher. However, we must remain cautious—this could still be another bull trap, leading to a reversal of the gains.
Today’s session will be all about confirmation—can buyers build on the overnight momentum, or will sellers step in to fade the move?
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📊 Market Overview & Open Pivots
🔹 $ES Open Pivot: 6074
🔹 $NQ Open Pivot: 21839
🔸 $ES retraced nearly half of yesterday’s rally, finding support near 6050 before bouncing.
🔸 $NQ showed relative strength, holding above daily bias 21757 and reaching our 21928 target overnight.
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🔑 Key Levels to Watch Today
🚀 Upside Levels – Bulls Need to Hold Momentum
✅ 21906 ($NQ) – The Line in the Sand for Bulls
$NQ has led this rally and must stay strong for upside continuation.
If $NQ pushes above 21906 and holds, buyers remain in control.
If it fails here, we could see a rapid pullback.
✅ 6107 ($ES) – Breakout Confirmation Level
$ES must clear and hold above 6107 for further upside potential.
A breakout above 6107 can target 6131 and beyond.
🎯 Upside Targets if Bulls Hold:
6131 ($ES) → Major breakout level.
22040 ($NQ) → Next bullish target above 21928.
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🔻 Downside Risks – Signs of Exhaustion & Bearish Reversals
❌ 6062 ($ES) – Must Hold for Bulls
This level was a major pivot yesterday.
If $ES falls below 6062, sellers may regain control and push price back down.
❌ 21757 ($NQ) – Critical Support
If $NQ falls below 21757, it could invalidate the bullish structure.
Below 21757 → Watch for a move to 21676.
📉 Downside Targets if Weakness Takes Over:
6040 ($ES) → Key support zone before bigger downside.
21570 ($NQ) → Major level where bulls must defend.
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📚 Market Education: Spotting a Bull Trap & Avoiding FOMO
📌 What is a Bull Trap?
A bull trap occurs when the market rallies aggressively, luring in buyers, but then quickly reverses and sells off hard.
We saw this happen yesterday on CPI. Today, after the PPI rally, we must be cautious of a similar setup.
📌 How to Recognize a Bull Trap:
1️⃣ Failure to Hold Above Key Resistance:
If $NQ can’t stay above 21906, that’s a warning sign of exhaustion.
If $ES struggles at 6107, it could mean bulls are losing control.
2️⃣ Heavy Selling Into Strength:
If price pushes up but immediately gets rejected, it means sellers are stepping in aggressively.
3️⃣ Failure to Hold Pullbacks:
If small dips get no buyers and the market continues lower, it’s a trap.
🔎 Pro Tip: Always wait for confirmation after a strong move—don’t blindly chase breakouts.
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🔎 Trading Scenarios for Today
📍 Scenario 1: Bullish Continuation → Trend Higher
If $NQ holds above 21906 → Expect continuation toward 22040.
If $ES breaks and holds 6107, buyers remain in control.
🎯 Target: 6131 ($ES) / 22040 ($NQ)
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📍 Scenario 2: Failed Breakout → Reversal Short
If $NQ pushes above 21906 but quickly reverses, it signals weakness.
If $ES fails at 6107 and starts breaking down, watch for a pullback.
🎯 Target: 6062 ($ES) / 21757 ($NQ)
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📍 Scenario 3: Choppy Session → Indecision Day
If price remains between 6062-6107 ($ES) and 21757-21906 ($NQ), expect a range-bound session.
Wait for a decisive breakout or breakdown before committing to a position.
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📌 Final Thoughts – Critical Day for Direction
✔ $NQ has led this rally—must stay strong above 21906.
✔ $ES must reclaim 6107 to continue higher.
✔ A failure at these levels could trigger a major pullback.
🚨 Key Takeaway: If buyers hold today’s gains, we could see further upside into the end of the week. But if weakness shows up, this rally could unwind fast.
👀 Stay patient, watch key levels, and trade smart!