S&P 500 (ES)

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Cycle Day 1 | Headline Shock vs Structural Trend

Sunday night trade opened with a clear case of headline-driven volatility as S&P 500 futures gapped lower following renewed tariff threats from the Trump administration tied to ongoing Greenland-related negotiations with several European nations. With U.S. cash equity markets closed for Martin Luther King Jr. Day, thin liquidity conditions amplified the initial downside reaction.

From a market structure standpoint, ES futures declined more than 1.1% (approximately 79 handles), slicing through short-term trend support at 6981.50 and probing the 50-day moving average. Nasdaq 100 futures led the downside with losses exceeding 1.5%, while Dow futures shed nearly 0.9%, confirming broad-based risk-off behavior.

Today’s auction unfolded in a holiday-thinned environment where price discovery is notoriously unreliable. While the break of trend support introduces tactical technical damage, there has not yet been sufficient acceptance below key structural levels to confirm a broader trend transition. The 50-day moving average remains the immediate battleground between responsive buyers defending structure and sellers pressing the headline narrative.

Bottom Line:
Volatility spiked, structure was tested, but conviction remains unproven. The next full-volume auction will determine whether this gap resolves as a temporary geopolitical flush or marks the beginning of a larger corrective rotation.

No panic. No drama. Let price confirm.

— PTG

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Transition from Cycle Day 1 → Cycle Day 2

One key observation from yesterday’s gap lower: price is now pressing directly into the January 3rd opening price, a level that often serves as a meaningful reference point for responsive behavior.

Importantly, the market has now established a Cycle Low at 6887.50, which becomes the primary key support level for evaluating this cycle’s performance. As long as that low holds, the broader cycle framework remains intact, despite the headline-induced turbulence.

It’s also critical to remember the conditions under which that gap was formed. Thin holiday trade exaggerated the downside move, creating the illusion of urgency without full participation. Today, with trading desks fully staffed and normal liquidity restored, the real auction begins.

The question now is simple:
Does the BTFD crowd remain enthusiastic at these discounted prices, or does participation dry up?

If historical tendencies assert themselves, the market should at least attempt a recovery trade, even if only to test whether sellers truly have conviction beyond the headline shock.

In short:
CD1 set the trap.
CD2 decides who controls the room.

No panic. No drama. Let the auction speak.

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🎯 Cycle Day 2 Focus — Scenarios in Play

🟢 Bull Case (Buyers Stay in Control)

• Hold north of 6910 ± 5

• Upside objectives:
  6925 → 6930 → 6935

Momentum remains constructive as long as acceptance holds above the pivot zone.

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🔴 Bear Case (Rotation / Reset)

• Hold south of 6910 ± 5

• Downside objectives:
  6900 → 6895 → 6890

Failure to reclaim the pivot opens the door for a controlled reset.

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📊 Key Reference Levels

• PVA High Edge: 6913

• PVA Low Edge: 6895

• Prior POC: 6901

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⚠️ Tactical Takeaway

Of course, nothing changes for PTG…Simply follow your plan. Take only Triple A setups and manage the $risk. ALWAYS HAVE HARD STOP-LOSSES in-place on the exchange.

PTG’s Primary Directive (PD) is to ALWAYS STAY IN ALIGNMENT with the DOMINANT FORCE.

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   ESH

Nasdaq (NQ)

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Transition from Cycle Day 1 to Cycle Day 2

March E-mini Nasdaq-100 futures are confirming the risk-off tone established during the holiday session, opening sharply lower and extending the Cycle Day 1 damage into today’s Cycle Day 2 auction.

Unlike ES, where structure is being tested, NQ has already lost structure.

Price not only broke below rising trend line support, but also crossed decisively to the weak side of the 50-day moving average at 25,575.10, converting that level into new overhead resistance, alongside the downtrend line at 25,618.50. From a PTG framework, this marks a clear shift in short-term control toward sellers.

Adding to the pressure, the overnight liquidation was strong enough to push price below a key 50% pivot at 25,411.75. That level now serves as an important line in the sand. Sustained acceptance below it materially increases the odds that Cycle Day 2 evolves into continuation selling, rather than a simple recovery attempt.

If sellers maintain control, downside references come into focus quickly:

• 25,265.25 — January 2 main bottom (first downside objective)

• 24,887.75 — December 17 main bottom (deeper structural support)

Notably, the Nasdaq is now negative on the year, having erased all of its 2026 gains. That relative weakness versus ES reinforces the message that tech remains the primary source of liquidation risk should broader markets fail to stabilize.

Cycle Read:
CD1 delivered the headline-driven break.
CD2 will determine whether this becomes a trend acceleration phase or whether buyers can reclaim lost structure and force a balancing response.

In Nasdaq terms, this is no longer a question of “dip buying enthusiasm” — it is a test of whether buyers are willing to defend value at all.

Let price decide.

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🎯 Cycle Day 2 – Trading Focus

Key scenarios in play for today’s session:

🟢 Bull Case

Holding north of 25420 ±10 pts opens the door to upside continuation toward:
25500 → 25553 → 25591

🔴 Bear Case

Holding south of 25420 ±10 pts keeps downside pressure intact with targets at:
25325 → 25285 → 25258

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Reference Levels

• PVA High Edge: 25383

• PVA Low Edge: 25279

• Prior POC: 25323

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NQH
Economic Calendar

https://us.econoday.com/
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.

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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