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TL;DR
ES has been grinding inside a broad consolidation range, trapped between 5850 support and ~5987 resistance, with 5925 as the mid-range magnet.
Monday followed the classic failed breakdown setup: a flush to 5870 trapped shorts, then ES surged straight into the upper part of the range.
Price is now flagging under highs and holding above key breakout territory around 5965. This is typical of strong continuation setups.
The “buy dips” regime is still firmly intact. Every retrace gets swallowed quickly, often on the same day.
The question now: Can bulls push past 6k for a clean breakout, or will fresh sellers send price back into the lower range?
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Quickfire Highlights
Big Tech Push
NVDA and AMZN seeing fresh upside momentum and relative strength in premarket. Soft landing optimism continues to fuel risk assets.
VIX Suppressed Again
Volatility remains compressed, hinting at a coiled spring setup across equity indices.
NFP Incoming
Friday’s job report could be the catalyst ES is looking for. A hot read may shift rate hike expectations fast.
We remain solidly in a “buy the dip” environment. Conditions have been conducive to short-term failed breakdowns, followed by powerful mean reversion or continuation higher. With large caps leading and breadth slowly improving, equity indices continue to favor patient accumulation rather than panic selling. Volatility compression suggests we are building energy. The next directional move is likely to be sharp.
Failed Breakdown at 5870 (Monday setup)
The flush below 5877 into 5870 formed a classic trap. That move launched ES toward the upper boundary of the range. We flagged this area Friday and again Monday—paid to be early. These types of setups often mark the beginning of bigger legs.
Tight Bull Flag Under Resistance
Price action since reaching 6k yesterday has formed a clean flag just under prior range highs. Bulls defending 5965 into the close was constructive. This is a textbook setup. Tight flags at highs rarely last long without resolution.
False Breakout Trap Risk
If bulls can’t punch conclusively through 6k, the top of the range may trigger a reversal. Watch for premature breakouts that stall above 5987 then fade back into the 5925 zone.
Support: 5945, 5925, then 5877–5870 zone (last trap base).
Resistance: 5987, 6k, then extension targets at 6020 and 6040.
Magnetic zone is 5925. This level has drawn price repeatedly and serves as the battleground backstop.
Structure favors higher unless bulls fail to hold above 5965. Any rollover back below 5945 would suggest momentum is fading.
The plan stays simple: hold long bias while above 5945 and especially above 5965. Look for clean triggers in the form of either:
A breakout above 6k and flag continuation
A controlled pullback into 5945–5950 that sets up a bounce toward new highs
On failed breakout attempts above 6k that fade quickly, I’ll watch for traps to form. If VWAP and 5965 break cleanly to the downside, caution increases and a day of chop may follow.
No need to pre-position ahead of payrolls unless there's a clean setup. Be reactive and patient.
Stocks waver as traders await Friday’s jobs data – MarketWatch
Fed officials downplay rate cuts despite softening indicators – Wall Street Journal
Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before making investment decisions.