After the forecast 05-08-2025Just take a look at the previous post I predicted where the price would go and see what happened and the sensitivity to these key levels. The price delivered perfectly on sensitive levels
ES1! trade ideas
Approachable Contracts for Trading Around Fed DecisionsCME Group E-Mini S&P Options ( CME_MINI:ES1! ) and Micro S&P Futures ( CME_MINI:MES1! ), #microfutures
On July 30th, the Federal Open Market Committee (FOMC) decided to keep the Fed Funds rate unchanged at the 4.25-4.50% target range. Investors now turn their focus on whether the Fed will cut rates on the September 16th-17th FOMC meeting.
According to CME FedWatch Tool, as of August 6th, there is a 92.4% chance that the Fed will cut rates by 25 bps in September. My observation:
• Before July FOMC, market consensus was no rate cut, with the odds at 95.3% as of July 20th. Investors now overwhelmingly expect rate cuts to come at the next meeting.
• Two Fed governors broke the long-run consent and voted against the FOMC decision.
Today, I would like to explore two trading strategies focusing on the next Fed decision.
We will start by breaking down all possible Fed decisions as follows:
1) Cut rates by 25 basis points (92.4%)
2) No rate cuts (7.6%)
3) All others, such as cutting by 50 bps and raising rates by 25 bps (0%)
If we deem the 3rd option to be statistically insignificant, we now have an event with binary outcomes, namely, Cut and No Cut .
Since “Cut” is the market consensus, we will translate the possible outcomes as:
• Meet market expectations (Cut Rates)
• Exceed market expectations (No Cut)
Furthermore, financial markets will likely react calmly if the Fed decision meets expectations, while asset prices could swing widely if the FOMC exceeds expectations.
Typically, US stock market indexes, interest rate contracts and the US dollar exchange rates are very sensitive to the Fed decisions. Our discussion today will focus on stock indexes. I will follow up on the other two asset classes in future writings.
Based on the above analytical framework, we could design two sets of trading strategies:
Sell Call Options if a trader expects the Fed to cut rates
• Since the decision meets expectations, asset prices would not move a lot.
• Options may expire worthiness, which allows sellers to pocket the premium as profit.
Sell Futures if a trader expects No Cut
• Since the decision exceeds expectations, S&P prices could go down sharply.
• With build-in leverage in futures contracts, a trader could realize enhanced profit.
Now, let’s explore how to structure trading strategies using S&P futures and options.
Hypothetical Fed Decision 1: Meet Expectations
Cutting rates is bullish for S&P as it will lower borrowing costs for component companies. However, since market already priced in a Fed cut, stock prices will not move a lot.
If a trader shares this view, he could explore selling Out-of-the-Money (OTM) Call Options on CME E-Mini S&P 500 futures ( NYSE:ES ).
Each ES contract has a notional value of $50 x S&P 500 Index. On August 6th, the September ES contract (ESU5) is quoted at 6,341, making the notional value at $317,050.
• Call options at the 6500-strike are quoted at $42. By selling 1 call, options seller will receive $2,100 in upfront premium (= 42 x 50).
• Options expire on September 19th, two days after the FOMC. If ESU5 price does not exceed 6500, options seller will pocket the premium as profit.
• Warnings: selling options involves significant risks. Seller could lose more than the premium he collected. To cut losses, seller could buy back at the open market and exit the position. This will avoid losses to accumulate by expiration date.
Hypothetical Fed Decision 2: Exceed Expectations
Since rate cut is already priced in, an Unchanged decision will likely cause the S&P to fall sharply, as expected future borrowing costs will go up.
If a trader shares this view, he could explore selling CME Micro S&P 500 futures ( MSTAR:MES ).
Each MES contract has a notional value of $5 x S&P 500 Index. On August 6th, the notional value of ESU5 is $31,705. Buying or selling 1 futures contract requires an upfront margin deposit of $2,135 at the time of this writing.
Micro S&P 500 futures are 1/10 in notional comparing to its E-Mini counterpart. With smaller size and lower margin requirement, the micro contracts are more approachable for non-professional traders. At the same time, they also enjoy the leverage built-in the futures contracts. Micro S&P contracts tap into the liquidity pool with the broad S&P contract suite.
Hypothetical Trade
• Short 1MESU5 at 6,341, and set a stop loss at 6450
• Trader pays $2,135 for initial margin
A “Meet” Scenario: S&P go up 1.5% to 6,436
• Short position loss: $475 (= (6436-6341) x 5)
• The maximum loss will be $545 if the S&P moves higher, due to the stop-loss feature
An “Exceed” Scenario: S&P falls 5% to 6,024
• Short position gain: $1,585 (= (6341-6024) x 5)
• The theoretical return is 74.2% (= 1585/2135), excluding transaction fees
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
S&P 500: The Underlying Trend Remains BullishLast week, the S&P 500 index entered a consolidation phase amid a packed fundamental calendar. The Fed’s monetary decision, PCE inflation, the NFP report, and trade negotiations all triggered short-term profit-taking. However, this consolidation has remained technically well-structured, with key supports intact, and the broader trend remains bullish.
Let’s conduct a technical assessment as this week unfolds under geopolitical pressure, with the Friday, August 8 ultimatum set for Russia.
1. The underlying trend in the S&P 500 remains bullish above the major support at 6050/6150 points
Let’s first examine the different timeframes for the S&P 500 futures contract. The triptych below shows monthly, weekly, and daily candlesticks. All three timeframes send the same message: the underlying trend in the S&P 500 remains bullish as long as the major support at 6050/6150 points holds on a weekly closing basis. This support zone corresponds to the former all-time high from last winter. In the short term, a retest of the support cannot be ruled out before the trend resumes.
2. Quantitative analysis does not show an overbought situation, with the percentage of stocks above the 50-day moving average still below extreme levels
Last week’s consolidation helped deflate a potential overbought condition. The percentage of S&P 500 stocks trading above their 50-day moving average was approaching an overbought zone, but is now back to 50%, giving the index renewed capacity to resume its bullish trend.
3. The Dow Jones is in an accumulation phase below its all-time high
The Dow Jones also shows a promising technical setup, potentially forming a bullish continuation inverse head-and-shoulders pattern. A breakout above the 45,000-point resistance is needed to confirm this signal. The equal-weighted S&P 500 index shows a similar technical structure.
4. Retail investor sentiment is still far from euphoric extremes
Market tops are always built in euphoria, especially among retail traders. According to the latest data from the American Association of Individual Investors (AAII), buying interest has increased and is slightly above the historical average, but still far from its typical overheating zone. This sentiment indicator confirms that the underlying trend in the S&P 500 remains bullish above the 6050/6150-point support (based on S&P 500 futures).
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Neutral zone trade formingThe daily structure in the S&P 500 implies this set up for a neutral zone market environment which means a sideways move. The market is waiting for information to create a directional move.
Day 2 — Trading Only S&P Futures — -$100, Grinding Back from Los Day 2 — Trading Only S&P Futures
Daily P/L: -100
Sleep: 8 hours
Emotions: Good
:thought_balloon: Today’s Trade thoughts:
I rushed into a trade thinking 6330 was going to be a good area of support to buy and oversized my position going 5 mes deep in my first trade and adding 5 more at the 48 min MOB at 6325 and got stopped out at the bottom down -400 and pretty much spent the rest of the day grinding back up.
Overall market seem to have rejected the higher timeframe resistance and deciding which direction to go.
:bell:News Highlights:
U.S. STOCKS END LOWER, VIX JUMPS AFTER WEAK ISM SERVICES DATA
:bar_chart: VX Algo Signals (9:30am – 2pm EST):
— 9:30 AM VXAlgo ES X1 Buy signal
— 9:40 AM VXAlgo NQ X1 Buy Signal
— 9:48 AM Market Structure flipped bullish on VX Algo X3!
— 11:00 AM VXAlgo ES X1 Buy signal (triple buy signal)
— 12:50 PM VXAlgo NQ X1DD Sell Signal
— 1:00 PM Market Structure flipped bullish on VX Algo X3!
— 1:30 PM VXAlgo NQ X1DD Buy Signal**
:chart_with_upwards_trend: Key Levels for Tomorrow:
Above 6332 = Bullish
Below 6310 = Bearish
ES - August 5th/6th Opening Session - PlanI had identified a potential bear flag this afternoon and stated that we needed to lose 6324 to start moving lower with targets of 6306 and 6296. This is still valid, and I anticipate the opening session to start that sell off to these targets. IF, price moves above 6336 before breaking below 6324 then the bear flag will be invalid, and we continue up higher before a pull back.
I plan to update my August 6th Daily Plan by 7am EST. I am hoping we get a nice pull back overnight so we can find some good setups to long for points tomorrow!
ES : Short levelThe level has been activated, so you can short it. I have slightly edited it since last time. It is best to scalp or pip it; I cannot promise any significant movement. Be careful when trading on news or at market close/open.
ES THOUGHTSES is on the verge of retracing to its monthly 50% correction mark, so my bias is bearish. Price retrace up nicely, looking for shorts to go lower. simple, sweet and short.
ES - August 5th - Afternoon Update1:25pm EST - Afternoon Update.
Price looks to be building a bear flag from the am sell off. This would be validated with a loss of 6323 level and you could look to short down to 6310, 6298. I would take my profit at 6310, as you could get a short squeeze right below or at the 6298 level. As a long ES trader, shorting for 10pts is not my edge. IF, you like to short that would be what to watch for.
I am still looking for a long at 6298 or 6275-77 flush and reclaim of these levels. We need some volatility and we might get some after 2pm today.
Nq & Es Key Levels and Scenarios 05-08-2025 We are currently positioned in a premium zone. This suggests that the price is likely to seek lower levels within discount areas. Therefore, upon the market opening, it will be crucial to observe price action in light of the increased volatility expected to enter the market.
The prevailing bias is that prices are likely to decline toward the predefined zones indicated on the chart. Depending on how price reacts at these key levels, we will be able to assess whether the downward movement will continue or if significant support will emerge, potentially leading to a full reversal to the upside.
In summary, there may be initial shorting opportunities, followed by potential long setups depending on the market’s reaction. Two scenarios have been outlined.
Wishing you all successful and well-considered trades.
/MES S&P Futures (ChopDay)Good morning guys here we have a 4hr ES Futures chart that I created clearly showing you a Yellow dotted bounding box which shows what I call a No Trade Zone / Institutional Liquidity Grab. In simple terms " Dont Trade / sit on your hands "
It seems that we are consolidating and awaiting for market direction either Up or Down, my educated guess is that we may have a little pump but higher probability to the downside based on my studies. You will see wicks above and below the bodies of the 4hr candles, that to me tells a story, what is the story? A day where the market will chop around most likely and take your money it is Bulls too scared to move higher and Bears scared to pull the trigger to the downside thinking they will get trapped but in my eyes the market is overbought and exhausted, it needs a break. Does it mean that it will drop, absolutely NOT, the market can in fact continue to push higher if it wants but in my opinion, it seems that down should be the way at least for the next few weeks or months.
ES - August 5th, 2025 - Daily Trading Plan7:45am EST - Overnight Session Update -
Yesterday we reached our main targets of 6325, 6350, 6375. Overnight we have been consolidating in a tight range between 6358-6378. We could get one good flush and recover of 6358 and we can long to 6378, 6400. If we breakout of 6375, we should continue higher to 6400, 6420+. I also would be careful as price has been in a narrow range, we could get a fake breakout above 6375. IF, price breaks out and then returns back inside the 6375 range, we can expect price to sell off and potentially pullback to retest the levels below. I hate trading a new position when price is at the high of the breakout and high of the session. I would rather wait to get a flush of 6358 and recover to long or flush much further down to the 6297 area and flush and recover would be even better.
I will update closer to 9:30am EST. My lean is to wait for a flush of 6358 and recover to long back to 6378, 6400.
Day 1 Trading Only S&P Futures — Starting with $200 Profit
Day 1 — Trading Only S&P Futures
Daily P/L:+ 204 :moneybag:
Sleep: 8 hours
Emotions: Tired and sored from muay thai.
:thought_balloon: Today’s Trade thoughts:
I was leaning bearish in the market because we had such strong selling pressure on Friday butonce we broke over the level i posted last week at 6330, I gave up on my bias and I just followed the signals and traded the the X1dd buy signal with @gohawks14 and shorted the Max gamma resistance around 6352 and called a day when i made $200.
I think for this week as we start the trading challenge, I want to have one account where i just make $200 and call it a day so this way i can build consistency and get my trading % up.
:bell:News Highlights:
DOW REBOUNDS NEARLY 600 POINTS, VIX PLUNGES AS U.S. STOCKS END SHARPLY HIGHER ON RATE-CUT OPTIMISM
:bar_chart: VX Algo Signals (9:30am – 2pm EST):
9:00 AM Market Structure flipped bullish on VX Algo X3!
10:10 AM VXAlgo NQ X1 Sell Signal
10:40 AM VXAlgo ES X1 Sell Signal
11:40 AM VXAlgo NQ X1DD Buy Signal (Double buy signal)
11:40 AM VXAlgo ES X1 Buy signal
12:40 PM VXAlgo NQ X1 Sell Signal
1:21 PM VXAlgo ES X1 Sell Signal
2:00 PM VXAlgo ES X3 Sell Signal
:chart_with_upwards_trend: Key Levels for Tomorrow:
Above 6332 = Bullish
Below 6300 = Bearish
:link: Recap & Charts: www.tradingview.com
Follow through to the upside is expectedFollow through to the upside in the S&P 500 daily chart is expected for Tuesday after the dramatic return of buyers on Monday.
Nq & Es Key Levels 04-08-2025 After MarketClosing exactly at the level I gave this morning...Incredible Accuracy...Just see the previous post to understand
Path into Q3Outlook for the Next Few Months
• Now–August OpEx: -2.5% to -5% slow correction
• August–September OpEx: potential 5–7.5% additional decline
• By late Q3: cumulative 10–12.5% drawdown (target S&P ~5700).
• October: possible bounce — or acceleration if data worsens
• End of Year: risk of deep drop à la Oct–Dec 2018 if trends continue
Macro Backdrop
• Watch for margin compression, CPI surprise, and unemployment uptick
• Private data shows more fragility than government numbers
• QRA-driven liquidity tightening may amplify downside risk
Political Timing and Fed Policy
• Administration may welcome controlled decline to enable early 2026 rate cuts
• If market doesn’t decline soon, blow-off top/melt-up into midterms possible
ES - Daily Session Trade Plan - Update August 4th, 2025 8am EST update -
Overnight price found a low at 6252 reached 6310 as the high. 6296, 6277, 6252 are the 3 main supports below. A flush and level reclaim of any of these supports should see price continue higher with targets of 6325, 6350, 6375.
IF price loses 6252 or Fridays low at 6240, these would be the higher quality levels we would want price to flush and reclaim for a move higher.
6297 support holds and we break the overnight high at 6310, the back test of this breakout would be worth a level to level move up to 6325.
The main levels I am watching is 6252 or 6240 to be tested, flushed and reclaimed. It would be best to wait for the 9:30am open and see how price reacts. I could see price flush in the first 30 mins, then catch bears offside and reclaim the Fridays lows. That would be a great short squeeze area to ride a couple of levels of back testing the overnight price.
Below Fridays lows and I will be waiting for price to build structure at the supports of 6225, 6210, 6194, 6175. If ES is selling hard into these areas, I would wait to enter any longs until I see structure build and reclaim the levels I have outlined. Let price come to you and be patient.
Corrective Dip or New Downtrend on the S&P 500 Futures?🟣 1. Impulses vs. Corrections – The Classical View
When price trends, it doesn't move in a straight line. Instead, it alternates between directional movements called impulses and counter-directional pauses or retracements known as corrections. Most analysts define an impulse as a sharp, dominant move in the direction of the trend—typically accompanied by rising volume and momentum indicators. Corrections, on the other hand, tend to be slower, overlapping, and often occur with declining volume.
Common methods to identify impulses vs. corrections include:
Swing structure: Higher highs and higher lows suggest impulse; overlapping lows suggest correction.
Fibonacci retracements: Corrections often retrace up to 61.8% of a prior impulse.
Moving averages: Price above a rising MA is often viewed as impulse territory.
Volume analysis and oscillators such as RSI or MACD are used to confirm price behavior.
Despite the abundance of methods, the distinction between impulses and corrections often remains subjective. That’s where the Directional Movement Index (DMI) provides an objective lens—especially when paired with price action.
🟣 2. Rethinking Impulses with the DMI Indicator
The Directional Movement Index (DMI), developed by J. Welles Wilder, offers a quantitative way to assess the strength and direction of price movement. It breaks down market activity into three components:
+DMI (Positive Directional Movement Index): Measures the strength of upward movements.
−DMI (Negative Directional Movement Index): Measures the strength of downward movements.
ADX (Average Directional Index): Quantifies overall trend strength but is optional in this discussion.
The key to applying DMI lies in the crossover between +DMI and -DMI:
When +DMI > -DMI, upward price moves dominate—suggesting bullish impulses.
When −DMI > +DMI, downward moves dominate—suggesting bearish impulses.
Calculation is based on a comparison of successive highs and lows over a specific lookback period—commonly set to 14 or 20 periods.
While EMAs track trend direction and momentum, DMI helps dissect who’s in control. This makes it a powerful filter when evaluating whether a breakdown or breakout is likely to become an impulsive trend—or just another correction in disguise.
🟣 3. Case Study – Two Breakdowns, Two Outcomes
Let’s apply this logic to two recent moments on the E-mini S&P 500 Futures (ES) daily chart.
🔹 Feb 21, 2025 Breakdown
Price broke sharply below the 20-period EMA. At first glance, this looked like a potential trend reversal. The DMI confirmed this suspicion: −DMI surged above +DMI, signaling downside impulses were in control. The market followed through with a clear downtrend, confirming the move was not just a pullback—it was a shift in market structure.
🔹 Aug 1, 2025 Breakdown
A similar sharp break below the 20 EMA just occurred again. However, this time +DMI remains above −DMI, despite the bearish price action. This divergence tells a different story: the breakdown may not be impulsive in nature. Instead, it's likely a corrective dip within a broader uptrend, where buyers are still the dominant force.
This is a textbook example of how a moving average crossover without DMI confirmation can mislead traders. By combining these tools, we’re able to make more informed decisions about whether price action is signaling a true shift—or just a pause.
🟣 4. CME Product Specs – ES vs. MES
Traders can express directional views on the S&P 500 using two primary CME futures contracts: the E-mini S&P 500 Futures (ES) and the Micro E-mini S&P 500 Futures (MES). Both track the same underlying index but differ in size, capital requirement, and tick value.
✅ E-mini S&P 500 Futures (ES)
Symbol: ES
Contract Size: $50 x S&P 500 Index
Tick Size: 0.25 index points
Tick Value: $12.50
Initial Margin: Approximately $21,000 (varies by broker and through time)
Market Hours: Nearly 24/6
✅ Micro E-mini S&P 500 Futures (MES)
Symbol: MES
Contract Size: $5 x S&P 500 Index
Tick Size: 0.25 index points
Tick Value: $1.25
Initial Margin: Approximately $2,100 (varies by broker and through time)
The Micro contract provides access to the same market structure, liquidity, and price movement as the E-mini, but with a fraction of the exposure—making it ideal for smaller accounts or more precise position sizing.
🟣 5. Risk Management Matters
Understanding whether a market move is impulsive or corrective isn’t just academic—it’s the difference between positioning with the dominant flow or fighting it. Traders often get trapped by sharp moves that appear trend-defining but are simply noise or temporary pullbacks.
Using tools like DMI to confirm whether directional strength supports price action provides a layer of risk filtration. It prevents overreaction to every EMA crossover or sudden price drop.
Stop-loss orders become vital in both impulsive and corrective conditions. In impulsive environments, stops help lock in profits while protecting from reversals. In corrective phases, they act as circuit breakers against breakouts that fail.
Moreover, knowing the product you're trading is critical:
A single ES contract controls ~$320,000 of notional value.
An MES contract controls ~$32,000.
This disparity means poor sizing on ES can magnify errors, while proper sizing on MES can offer flexibility to test, scale, and hedge with tighter capital control.
Whether you're reacting to price or preparing for continuation, risk management is the only constant. It’s what turns analysis into disciplined execution.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
ES bearish sentiment for Monday aug 4thIll be watching for a bearish set up to form around the bearish 4 hr fvg to take out previous month low
SP500 ShortSP500 is now net short on the regression break.
I am short the Russell2000 from last week and I am considering this trade into Summer.
ES - August 4th, 2025 - Daily Trade PlanI am providing my plan for the session and will update before 8am EST with overnight session price movement and what I am looking to do during the 9:30am EST session. All levels below are labeled or colored.
6:07pm EST - Opening Session Overview for August 4th, 2025 - Daily Trade Plan
We could very well dip to 6230-40 range and then move back up the range to retest the 6375 level. The key levels I will be looking to reclaim and take some points from are as follows:
Resistances – 6297, 6315, 6330, 6350, 6370
Supports – 6240, 6225, 6190.
Ideally, we lose Fridays low of 6239 and reclaim it for a level-to-level move. If not, we need to continue to build structure between 6296 and 6240. 6275 was rejected 2x on Friday late and if we clear 6275, a back test of this would be a good place to grab points to 6296 and then possibly continue to 6315, 6330, 6350, 6370.
I will not be shorting or engaging in any level below 6240, unless structure builds at the 6225, 6190 lowest it would want to go.
Update will be provided by 8am EST for 9:30am EST Session open.
ES | SP500 - Weekly Recap & Gameplan - 03/08/25📈 Market Context:
Traders are currently anticipating a possible 0.25% rate cut during the upcoming September FOMC meeting, which continues to support the broader bullish framework.
Although the market pulled back after the Non-Farm Employment Change data came in below expectations, overall optimism remains.
Sentiment has now cooled off from last week's greed and shifted to a more neutral stance. Historically, August tends to bring some chop and pullbacks, but the structural bias still leans bullish.
🧾 Weekly Recap:
• ES kicked off the week with strong upward momentum, climbing steadily into Thursday.
• Along the way, price swept a key 4H swing high, breaking into new highs before initiating a retracement.
• This price action hinted at a short-term distribution and possible liquidity grab ahead of a correction.
📌 Technical Outlook & Game Plan:
→ I'm anticipating a move into the Monthly Fair Value Gap — a high-probability liquidity zone on my radar.
→ That area could act as a springboard for bullish continuation or at least provide a strong reaction.
→ Until that happens, I remain short-biased targeting the 6226$ zone, which I've marked as a major level.
🎯 Setup Trigger:
Once price taps 6226$, I'll monitor for:
• Clear break of structure on the 4H and 1H timeframes
• Formation of new demand zones indicating potential reversal
→ On confirmation from the lower timeframes, I’ll shift my focus toward long setups, potentially targeting new highs.
📋 Trade Management:
• Stoploss: Below the demand zone formed on 1H–4H
• Target: I’ll trail my stop to lock in profits as price moves higher
• Note: Although I’ll be watching for ATH retests, I plan to manage risk actively and book profits along the way
💬 Like, follow, and comment if this breakdown supports your trading! I’ll be sharing more detailed setups and educational posts — stay connected!
