Trading Desk

NQ1! Daily,

I'm waiting for NQ to tag the orange line.

Our projection proved to be correct. As I mentioned last Friday, futures would pull back ahead of the Fed meeting and reverse after Fed.

Futures spiked higher overnight on trade deal news, with the ES1! testing key resistance around 5720 but failing to break through. So far, the index has been range bound between the low 5700s and low 5600s. Despite positive catalysts, from China trade talks to the UK trade deal, the index has struggled to breakout of this range. What doesn't go up on good news may come down on no news.

ES daily, struggling around the broken channel line.

We may put a ST low below 5600 after tagging the red neckline. The downside appears incomplete, but continuous news flow is truncating intraday moves. Eventually, the index will do what it must. I expect aST low below 5600. Once this move concludes, we may finally go for the tulips.

As we expected, futures began pulling back from Friday's highs at 5724, which is the level I gave you on Thursday. Our projection was that the pullback should lead to one final rally after this week's Fed, followed by a larger and more durable reversal.

The SPX weekly chart shows the price closed inside the channel on Friday, but this will likely prove to bea fakeout, as the index will open below the channel this week, confirming the bearish scenario.

The SOXX/NDX ratio confirms the LT bear market.

I am expecting ES1! to test the 5655-5650 range early in the session. If this doesn't hold, we could see 5640, then the 5630s. Big support is 5590 3. I don't expect ES to extend this ST downside beyond this level.

Conversely a break above 5675 extend the upside to 5688-90

Futures sold off in the overnight session, but the real dump came after GDP came in negative, suggesting that we may already be in a recession.

ES1! daily chart shows that the index reversed from the broken neckline.

ES 4h chart reveals that the index has been churning between 5500-5600 in a slow, choppy uptrend over the last four sessions. Yesterday, ES tested 5595 on some tariff related noise, but during the test, we observed massive selling under the surface, evidenced by an extreme negative divergence between NYSE ticks and ES.

We're opening with a large gap, and with several pending market events coming up later this week, my guess is that the downside may still be limited from here. However, as always, stay alert. There are so many retail traders who got sucked into this market over the last few sessions based on questionable technical narratives. This crowd could collectively dump their positions in the morning session, triggering a sharp spike downward.

SOXX, showing two potential reversal zones

Futures opened lower on sunday and stayed in the red overnight and premarket on lack of positive news and Huawei's new AI chip, which could rival NVDA.

This week is packed with big economic data and earnings. Key highlights: MSFT and META report Wednesday, then AAPL and AMZN on Thursday. We've also got GDP, PCE, ISM, PMI, and NFP dropping this week.

As I mentioned, I'm expecting a major swing top this week. But patience will be key. With so many big events, we'll likely see some short-lived upside spikes. Those spikes could be the best chances to open swing shorts.

ES1! Weekly showing the broken long term channel gets tested around 5640

A lot of people have been asking, and I've said it many times this week, don't short this week.

We'll have better opportunities next week. I'm expecting a swing top next week, not this week

Once I do short next week, the market will have to prove me wrong before I even think about a bottom.

So far, everything's playing out as expected in the bigger picture:

1. Weekly low is between low-to-mid 5100s.

2. Weekly close is green.

3. Swing high comes next week.

Ideally, we'll make a marginal higher high next week, and then the second leg of the crash begins. I'll go into more detail about that later, but for now, just know it's a B wave move to the 4500 area.

There are also levels that could truncate this move. If that happens, we might see a few more weeks of corrective upside. But I'll talk about those later.

ES1! 4h, rejected at the declining trendline resistance during Asia hours.

Futures surged on Trump's comments about China tariffs and Powell.

The index will open right around the triangle resistance today. It will likely break this line, but we may not see much follow-through afterward.

ES1! has already hit my upside target of 5450, which I gave you on Monday's premarket when the market seemed to be cratering. From this point, it's a coin flip, a small tweet from Trump could crash the market or fuel another rally.

The downside won't stick around because there were so many "trade talks going well" comments and "there are 34 trade deals currently pending" remarks from the White House today. The market won't stay down into the close, knowing there could be a trade deal announcement after the bell.

So, basically, we're back to the era where the White House watches ES1! tick charts and makes ridiculous comments just to prop up the market. This will work until it doesn't.

I wouldn't short into the close today.

Always keep the big picture in mind. Remember what I said at the beginning of the week:

1. A weekly low around low-to-mid 5100 this week

2. A weekly positive close this week

3. We'll make a swing high next week, and from that high, we'll head to sub-4800 in the following weeks

I gave these projections when ES was cratering on Monday in premarket.

#1 already happened.

We need a weekly close above 5320 to satisfy #2.

We'll see about #3 next week.

Yesterday, ES1! tested a very important zone around 5130, which is a well defined support level that could serve as a launchpad for another swing wave toward 5400-5450.

However, upon closer inspection of the charts, NQ1! narrowly missed its support area, leaving a slight possibility of retesting yesterday's low or making a marginally lower low before resuming an upward move.

The key bull/bear line to watch is 5180, as a break there may trigger such a test.

SOX tends to lead at both local tops and bottoms

The breakdown in SOXX/NDX suggests a continuation of the bear market.

ES1! tested 5500 area multiple times before yesterday's reversal. This is the key inflection point I mentioned in the previous post.