After last week, we completed the V-shape recovery off 6818-6823, rallying more than 200 points and printing a new ETH ATH at 7043.25. That push was followed by a LAAF of the prior ETH ATH, which rotated price back down into the FOMC window and the first major earnings prints.
Buyers are very much still in the game. However, when buyers struggle to gain traction at or near all-time highs, liquidation breaks often follow. These moves tend to clean out weak hands and invite stronger buyers from lower levels. Thursday’s liquidation was one such attempt. Friday’s close, however, leaves buyers exposed as ES failed to reclaim the FOMC/earnings low area, which keeps the risk of another liquidation leg firmly on the table.
On Friday, we also saw a major liquidation in metals, followed by further weakness in Bitcoin over the weekend. We should be mindful of potential risk transmission into equities. While leverage and speculation in equities may not match the precious metals unwind, I’d caution against assuming there can’t be secondary effects. It’s entirely possible there aren’t and it’s also possible flows rotate back into the relative “safety” of equities. We’ve gapped down two Sundays in a row and both were bought. We don’t need to predict, we can only react.
💭Playbook
🎯Weekly Pivot 6902-08: This aligns with the weekly low (6898), overlapping value, and the breakout value gap at 6906 that was filled last Thursday. Failure to hold the weekly pivot should be defined by value building lower, along with lower highs and lower lows.
📈Trading Above: Holding above the weekly pivot targets 6918-6924, then Friday’s low / Jan VAL at 6929, followed by Friday’s VAL at ~6940. Continued rotation higher within Friday’s range targets the ER low / Friday VAH at 6977.25 and then 6990–6996 (upside pivot). The FOMC/ER low zone through the upside pivot is a pivotal range for buyers to reclaim and hold. Acceptance above that range puts the ETH ATH magnets back in play.
📉Trading Lower: Holding below the weekly pivot, with 6918-6924 acting as resistance, targets 6890-6894 and last Sunday’s opening low at 6880.25, followed by 6837-6846 and 6808-6822. Trading below 6880 puts us back into the lower distribution for a second time and would require buyers to show up. That said, because 6890-6894 sits just below last week’s low, it’s important to watch for a LBAF of last week’s cash-hours low at 6898.
When markets fail to accelerate off a strong base after key events, it can be an early signal that structure is shifting. The task for buyers is clear: reclaim Friday’s high, which aligns with the FOMC/earnings low, ideally via a gap up or opening drive higher. If achieved, the ETH ATH becomes the obvious magnet. Failure to do so keeps the door open for short-term pain for longs.
This is specifically a note for short-term participants. Historically, prior ETH highs can precede 3–5% pullbacks before the market ultimately cleans up the ETH ATH. With GOOG, AMZN, and NFP on deck next week, continued difficulty for buyers increases the odds of revisiting lower references such as 6880, 6837-6846, and 6808-6822. Also note 6814 as an additional ETH low reference.
ES Live Chart: https://www.tradingview.com/chart/f8EEzTyy/