S&P 500 (ES)

Prior Session was Cycle Day 3: Wild Card Delivered (Again)

Cycle Day 3 lived up to its reputation — volatility with purpose, not chaos. The market gave both sides opportunity, but only one side respected structure.

🎯 The Line in the Sand (LIS)

6995 was the fulcrum — and price told the story multiple times.

• Early reaction from the upper D-Level delivered a sharp response

• CPI ramp fulfilled all upside objectives

• Once price slipped below 6995, the burden shifted squarely to the Bulls

Markets don’t argue. They respond.

For greater detail of how this day unfolded, click on the Trading Room RECAP 1.13.26 link.

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…Transition from Cycle Day 3 to Cycle Day 1

Transition into Cycle Day 1: Still Range-Bound

Markets remain effectively range-bound, albeit perched at new all-time highs—a bullish positional advantage, but notably lacking a catalyst capable of producing a decisive expansion move.

Key Observations:

1. Incremental ATHs, not conviction.
   Yes, new all-time highs continue to print—barely. Each session feels more like a probe than a declaration. Longs appear to be testing upside pressure points, searching for that level where a broader short-squeeze might finally ignite.

2. Shorts press, but don’t puncture.
   On the other side, shorts continue to lean on lower range boundaries, attempting to trigger long liquidation cascades. Thus far, results have been underwhelming. The BTFD crowd remains disciplined, consistently repricing long inventory and absorbing supply without panic.

The net result?
The first full week of the new year has unfolded as a neutral, range-bound auction, governed more by rhythm than by narrative.

Earnings season has officially kicked off with the usual players from the banking sector—important, but not yet market-moving. The heavier artillery arrives later this month, when reports from the all-mighty tech complex begin to shape expectations and risk appetite more meaningfully.

For now, both bulls and bears appear content to sit in their respective neutral corners of the ring, waiting patiently for a true catalyst to force engagement.

As Muhammad Ali so perfectly put it:

“Float like a butterfly… sting like a bee.”

No need to force trades.
No need to anticipate fireworks.

Stay patient. Stay rhythmic. Let the market reveal its hand.

***RED ALERT: Supreme Court of the United States (SCOTUS) is scheduled to reveal its decision on Tariffs. This has potential to be a impactful market moving catalyst with long-term economy wide implications.

While the tariff ruling is highly anticipated, there is no guarantee it will be among the decisions released on Wednesday January 14, 2026.

So just be aware of the reveal @ 10 am thereafter.

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   ESH

Nasdaq (NQ)

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…Transition from Cycle Day 3 to Cycle Day 1

Transition into Cycle Day 1: “Carbon Copy ES Narrative”

For today’s NQ game plan, feel free to take the ES narrative, walk it over to the Xerox machine, press COPY, and hit START.
No jams. No toner issues. The structure is essentially identical.

Just change the price to protect the innocent…
(or expose the guilty — depending on which side of the tape you’re standing).

Today marks Cycle Day 1, and under normal market mechanics, the expectation would be for some degree of corrective pressure to unfold. The objective isn’t panic — it’s discovery. Specifically, a probe for a new, secure cycle low from which the next rotational rally can be properly staged.

Translation:
This is the part of the movie where the market checks the foundation before deciding whether to build another floor higher.

Key considerations:

• Declines are expected to be probing, not catastrophic

• Structure matters more than magnitude

• Weak hands shake out; inventory rebalances

• Strong responses at reference levels keep the bullish framework intact

Relevant scenario levels are outlined below and will dictate whether Cycle Day 1 plays its traditional role…
or decides to improvise.

No rush. No bravado.
Let the tape confirm intent before pressing.

Same playbook. Different ticker.

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NQH 

Economic Calendar

Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.

Stay Focused…Non-Biased…Disciplined  ALWAYS USE STOPS!

Good Trading…David

“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –BR

*****This trade strategy report is disseminated for “education only” and should not be viewed in any way as a recommendation to buy or sell futures products.”

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.

This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 –HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN