Sellers in Control, Support on Trial
IN THIS EDITION
- 01 / Market Context
- 02 / ES Chart
- 03 / Important Levels
- 04 / Trading Higher
- 05 / Trading Lower
- 06 / What Else…
Strength is constructive.
Confirmation is still the job.
Sellers defended the levels that mattered last week. Wednesday’s earnings failed to produce a breakout, and the early-week rally gave way to fresh lows. ES now sits at a more consequential test: 7644-7649, where a failed breakdown could trap sellers, while sustained trade below it would open the next leg lower. My starting bias remains bearish, but I want confirmation at support before pressing that view.
Last week’s repair zones held: ES topped at 7812.25, below 7815-7820, while NQ peaked at 30,113, short of 30,210-30,237. From Wednesday’s highs, NQ declined nearly 4% and ES roughly 2%. Sellers produced a lower high, a marginal lower low, and more volume at lower prices. They still need to turn that control into meaningful downside progress.
The bigger picture
ES value overlapped firmly lower for the week, but the monthly structure remains less decisive. ES has not taken out a prior month’s low since establishing its low for the year, and the similar value areas across August, September, and October suggest a broader balance is developing.
That distinction matters. Short-term weakness can continue without automatically becoming a larger correction. A regular-session break below 7575 would bring the monthly timeframe into balance. Even then, I’ll watch for a backtest higher before assuming an uninterrupted move toward the summer lows.
NQ remains the weaker backdrop. Its developing monthly profile has a downside double distribution, and the failed breakout from its multi-month balance keeps the July low near 27200 in play as a larger structural target. However, monthly value still overlaps higher, and positioning is getting stretched. NQ needs to reclaim 30,210-30,237, then 30,520-30,546, to provide clearer evidence of strength. ES still needs 7815-7820 for bulls to take the broader advantage.
Thursday’s cross-asset action also deserves attention. Strong bonds and yen alongside selling in equities and gold looked firmly risk-off to me. ZB stalled Friday while backtesting its former multi-week range. A sustained push back through that range would add to my concern for equities.
Important levels to monitor
02 / THE DECISION MAPThese levels organize the plan. The reaction at a level matters more than the number alone.
| Level | What I’m Watching |
|---|---|
| 7834-7844 | Upside Pivot |
| 7802-7812 | Last WK High |
| 7765 | Value gap |
| 7742.50-7751 | RTH Bearish Gap |
| 7712-7717 | Friday EU High, Thursday VAH |
| 7676-7686 | Weekly Pivot, bottom of balance, Oct 16 mother bar low, Friday VAH, Thursday lows |
| 7569-7575 | First major objective; a regular-session break below 7575 brings the monthly timeframe into balance. |
| 7541-7543 | Potential bottom of the broader overlapping range. Watch for stabilization or a backtest higher. |
| 7514-7522 | Downside Pivot |
Buyers need to repair the breakdown
03 / TRADING HIGHER SCENARIOA quick reclaim of 7676-7686 would put ES back inside the October 16 mother bar and raise the risk of trapped sellers. Buyers would still need to clear this past Friday’s high with continuation to fully negate the breakdown. A rally first can also leave us with more two-way trading inside the broader range.
The next pivot is 7712-7717, replacing the prior 7706-7712 reference. A rejection or look above and fail here can rotate back to 7676-7686. Holding above it improves the recovery case and brings Thursday’s afternoon high at 7742.50, followed by supply at 7731-7735, into focus. A fresh loss of 7712-7717 after testing that supply would reopen the lower pivot.
Above that, the bearish regular-session gap at 7742.50-7751 is likely to react on its first test. I’m less convinced it becomes durable weekly resistance. If a rejection there holds the 7731-7735 area, I would look for another push toward the value gap near 7765.
7769-7772 becomes the next important support test. Supply remains near 7784-7788. Rejection there followed by a fresh loss of 7769-7772 could send ES back toward the 7730s. Clearing supply and holding that support instead favors 7802-7812, including last week’s 7812.25 high.
A sustained move above 7802-7812 could put trapped sellers under pressure and support another attempt through 7834-7844, then toward the all-time high. Until buyers prove acceptance above those areas, I’ll continue to respect the upper end of the range.
Failure or continuation at support
04 / TRADING LOWER SCENARIO7644-7649 is the immediate downside decision area. It marks the former all-time-high region and an important volume-profile reference. Friday held it, but ES closed below the October 16 mother-bar range.
A brief break beneath last week’s low followed by a prompt reclaim, a look below and fail, could rotate back to 7676-7686. Reclaiming that second zone would strengthen the recovery setup and bring the upside plan into play. Bulls do not want sellers building meaningful time and volume below 7644-7649.
If sellers instead break that area and sustain the move, it confirms continuation from the multi-day range breakdown. The wider 7460-7520 region is a major higher-timeframe decision area. I’ll manage any move into it level by level. Losing near-term support does not automatically put the July and June lows on the immediate agenda.
The plan for the week
05 / Final ThoughtsThe weekly straddle has widened, and the October 27-28 FOMC meeting adds another catalyst. I’m allowing for a wider trading range while staying selective about location and confirmation.
The opening move matters. Acceptance below 7644-7649 favors continuation toward 7569-7575, then 7541-7543. A failed breakdown followed by a reclaim of 7676-7686 would shift my attention toward trapped sellers and a rotation higher. Sellers have the short-term advantage, but support has to fail before the next downside leg is confirmed. I’ll trade the response, stay flexible around the Fed, and let acceptance or rejection at these levels determine the next trade.