S&P 500 (ES)

Prior Session was Cycle Day 2: Balancing Day…Normal CD2

FRYday delivered a textbook Cycle Day 2, marked by disciplined balance and controlled consolidation. The key Gamma level at 6925 (ES) held firm as structural support, while 6965 (PTG Level) capped the upside with equal conviction. Total containment. No escapes. Premiums quietly bled out as intended.

Traders who respected CAPITAL PRESERVATION FRYDAY protocol didn’t just survive the session—they advanced position. As the new week unfolds, they’re firmly in the driver’s seat, capital intact, optionality alive, and patience already paying dividends.

For greater detail of how this day unfolded, click on the Trading Room RECAP 1.23.26 link.

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…Transition from Cycle Day 2 to Cycle Day 3

Transition into Cycle Day 3: GLOBEX GAP Down…BIG EVENT Risk Week

Primary goal for Cycle Day 3 is to trade above the CD1 Low (6911.25) to secure a positive 3 Day Cycle Statistic (92%).

We take a detour for today’s report to outline the major weekly impactful events that the markets will be dealing with.

The E-mini S&P 500 (ES) futures gapped lower on Sunday night, January 25, 2026, primarily due to heightened uncertainty surrounding a “consequential” week featuring a Federal Reserve interest rate decision, a barrage of Mega-Cap earnings, and escalating trade tariff rhetoric

• Federal Reserve Anticipation: Investors are bracing for the January 28 FOMC meeting. While the Fed is expected to keep rates at 3.50%–3.75%, markets are on edge regarding Chair Jerome Powell’s press conference and potential pressure from the White House to lower rates.
• Mega-Cap Earnings Risk: The market is pricing in volatility ahead of “Magnificent Seven” earnings. Tesla, Microsoft, and Meta are scheduled to report on Wednesday, followed by Apple on Thursday, which will serve as a critical test for the AI growth narrative.
• Escalating Tariff Threats: Renewed protectionist rhetoric from President Trump—specifically a threat of 100% tariffs on Canadian goods if they reach a trade deal with China—has created significant uncertainty for North American supply chains.

— PTGDavid

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   ESH

Nasdaq (NQ)

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…Transition from Cycle Day 2 to Cycle Day 3

Transition into Cycle Day 3: Magnificent 7 (MAGS-7) Earning Risk

Mega-Cap Earnings Risk: The market is actively pricing volatility ahead of the Magnificent Seven earnings gauntlet. Tesla, Microsoft, and Meta report Wednesday, with Apple on deck Thursday—the final boss and a critical referendum on the durability of the AI growth narrative. Expect exaggerated reactions, thin patience, and zero forgiveness.

Overnight Structure:
The GLOBEX gap down has reclaimed the Cycle Day 1 low at 25,483.75—now the line in the sand. This level must hold during regular trading hours to preserve bullish Cycle integrity.

• Acceptance below CD1 low opens the door to CD3 range expansion lower

• Responsive buyers here = damage control and potential mean-reversion

• Failure to reclaim value quickly keeps sellers firmly in command

Cycle Day 3 Playbook:
CD3 is notorious for decision-making. Momentum either accelerates… or snaps.

• Above CD1 low → Bulls still breathing, trading defense

• Below CD1 low → Cycle morphs into risk-off liquidation

• Expect headlines to drive order flow, not nuance

Bottom Line:
This is no longer about technicals alone—earnings are the accelerant. Trade smaller, respect levels, and remember:

Cycle Day 3 doesn’t ask for opinions—it demands compliance.

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NQH 

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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.

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