how to trade ES right now

Hey traders.

Alright alright no more sales emails.

Only alpha.

That being said, we’ve got a lot to digest so let’s dive right in…

Impact Snapshot

  • Inflation slows again, the Fed’s preferred price tracker showed

  • Jobless claims tick higher, continuing claims highest in two years

Market Evaluation

The scorching rally in stocks this month faced challenges in gaining additional momentum.

Signs of buyer exhaustion emerged after a rally that put the S&P 500 5% away from its all-time high.

Treasuries reversed course at the end of the month, with yields rising on speculation the market has moved too far in projecting Fed rate cuts.

All eyes on tomorrow’s Fed Chair Powell Speaks at 2:00pm ET as well as ISM Manufacturing PMI at 10:00am ET to close the week.

Markets Breakdown

Our Morning report that we’ve posted in the overnight session over on X, highlighted the key scenarios and levels that played out on the exact manner we were looking throughout the session. (Read it here)

The overnight inventory of 29/11 was considerably long, with the European session open extending the market to the upside.

The US opened with an upside gap of 0.45% above the settle price.

You’ve heard us say many times: “More often than not, the odds favor a correction of the overnight inventory towards the settle”.

It’s something we use in order to not get caught up and over extent.

This observation by itself, is only a single data point. For that to happen we first need more confluence to add to the mix for a high probability trade.

That confluence came with our key identified area of resistance at 4597, which was the first upside level we’ve mentioned.

As we’ve written in the same report, if there is no correction of the gap early, we are looking for continuation to the upside.

This was not the case as the 4597 acted as the absolute top of the session, with aggressive sellers stepping in the market within the first period (30 min) and pushing the market to the downside.

The market looked above and failed, retracing all the way back to correct the overnight imbalance.

🎯 With the confluence of our indicators printing a bearish sign, aggressive selling Volume and the key identified area of resistance at 4597, with destination as we also later updated here, the pivot/settle.

This was a practical example of how we are using market structure based analysis and algorithmic trading in order to execute high probability trades.

ES

Market opened today and edged lower but still remains within the multi-day balance area. On the downside, we are looking at a re-test of the top of 4-balance area. Upside continuation will be determined on market’s ability to re-claim the flip zone.

The targets we look for until NY close & Targets to pay attention Tomorrow:

  • Upside Levels: 4583/4605/4621/4643

  • Downside Levels: 4543/4536/4531/4507

That’s all we got for you today.

If you found some value in this, be sure to share this Substack with a friend.

We’ll see you on Sunday for the Big Sunday report.

-The QuantVue Team