Trading Desk · Meridian

Trading Desk · Meridian

May 12, 2025

Despite the Spike, I Remain Bearish
I'll reiterate what I wrote on 05/01: This correction wasn't triggered by tariffs, it's driven by much deeper fundamentals. My stop loss for this trade sits at above 5900, around 5950 to be precise.

In a bear market:
Good news is bad news.
No news is bad news.
Bad news is bad news.
Terrible news is good news.

We saw this play out on 04/06, when the market bottomed amid extreme pessimism and the worst possible headlines. We saw it again when Trump's UK deal announcement failed to spark a breakout in ES1!. Based on these patterns, I believe we're still in a bear market.
Now, I could be wrong. This might just be a deep correction that already bottomed on 04/06 on peak fear. Or perhaps I'm simply too early in calling the next leg down. If I'm wrong, it'll cost me the gains from going long at the bottom and closing the next day, potentially one of my largest single trade losses in a while. But that's trading. There are ups and downs. This is just a downswing after a long stretch of ups.

I started blogging years ago to document my trades and refine my thinking. But as this CN community grows, I've noticed a shift toward copy trading rather than seeking diverse perspectives
I encourage you to use this space to gain insights from an old man, not to blindly follow trades.
Copy trading is like trading on gossip. You surrender your decision making power and rely entirely on someone else's rationale. When the trade turns against you, you're left agitated and clueless because you never understood the logic behind it.
Here's the difference:
I can sleep soundly down 100, 200, even 400 handles because I know why I'm in the trade, and I'll exit when the market proves me wrong.
A copy trader panics over a 20 handle loss because they're clinging to someone else's logic, not their own.
Trade your own convictions. Or don't trade at all.

May 9, 2025

NQ1! Daily,

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

May 8, 2025

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.

May 6, 2025

Q：Sean, Have you closed your position last week?
A：no. i'm 1/2 short ES1! from 5571

Futures sold off in the last hour yesterday ahead of PLTR's earnings, which was not spectacular enough to justify the recent runup. As a result, the stock sold off, once again proving that the market anticipated this move before the announcement. This suggests that most, if not all, earnings are now leaked, and insider trading is being openly practiced. We also frequently see similar accuracy with economic data releases. This is the age of fraud where fraud is normalized and goes unquestioned. Recognizing these nuances can definitely help with your day trading.

Anyway, the market continues to follow our ST projection that we were expecting a pullback into the Fed meeting. We should see one last rally after tomorrow's Fed, so I'm waiting for that opportunity to add short position for the next leg of the bear market.

A break below 5610 takes us to 5588-90, which is an important swing support. A break below this zone can trigger a larger sell off towards 5525-5545 area.

I am expecting ES1! to find a support in the morning session. and remain in a range until tomorrow's FED

May 5, 2025

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

Apr 30, 2025

Added 1/4 at 5604, now 1/2 short from 5571

ES1!

Our options team opened SPX puts yesterday when ES1! was around 5595, citing abnormal algo selling pressure. That could very well be the high of the week.

Opened 1/4 ES1! short at 5537

I expect ES1! to test sub 5500 early in the morning, probably 5485. This is a critical ST pivot. If broken, we could see an intraday drop toward 5445-5450, with 5400 as the next major level.

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.

Apr 28, 2025

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

Apr 25, 2025

5550 was initially my max target for next week's swing high. ES1! touched this major resistance during Asia hours. I'm reluctant to short today because it's Friday, I don't hold positions over the weekend with all this crazy tariff talk continuing. If the market reverses lower, I'll have no problem entering shorts on the downside since we've got plenty of room to sub 4800.

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.

Apr 23, 2025

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.

Apr 22, 2025

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.

Apr 21, 2025

Our stop was hunted again (LoD was only 2 handles below our stop). The market then rallied 60 handles into the close. Today's low could mark the weekly low.

ES1!

Open 1/2 ES1! long at 5142

The crash week starting April 7, which opened below 5K, was the darkest moment of this intermediate term move. That weekend, I predicted we would likely rally during the week and set a target price of 5450. ES1! rallied 13% from the Sunday low intraweek, from 4830 to 5500. The following week, which was the last week, opened very green as the Trump administration introduced some tariff delays over the weekend. Nasdaq weekend futures were up as much as 7%, and NQ1! opened Monday's session significantly higher. I had warned that we would likely see a sharp price reversal around the 5500-5600 area. NQ closed the week down 4%.

Now, this week, we are opening negative, with ES trading 1.1% lower in premarket. Based on the same pattern, we will likely see positive numbers during the week and a positive weekly close. Of course, no pattern or trend lasts forever, so we will remain alert as always. The low or mid-5100 area may mark the weekly low early in the week. We should see an important swing high sometime next week, and from there, we should head toward new lows below the April low of 4830.

Apr 17, 2025

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.