Gap Closed, Trend Holds: Will 6000 Be the Next Magnet?
Markets absorbed the downgrade shock and snapped back. Now, the grind continues — but for how long?
Market Context – May 20, 2025
After yesterday’s sharp recovery from the U.S. credit rating downgrade, the market showed impressive resilience — with ES closing the entire 100+ point gap from Sunday night’s lows. ES reached as high as 5993 and is now consolidating around 5970. NQ also pushed up to 21,550 before settling around 21,465.
While SPY and QQQ are slightly red this morning, the uptrend remains intact. We’re now in a digestion phase, hovering just under the psychological 6000 level on ES. This could either be a staging zone for another breakout — or the early signs of exhaustion. Traders should stay patient and let the range resolve.
Key Levels to Watch
ES: 5941 (support), 5993 / 6000 (resistance)
NQ: 21,320 (support), 21,550 (resistance)
SPY: 592.20 (support), 596.50 (resistance)
QQQ: 518.60 (support), 522.80 (resistance)
Bullish Scenario
Continuation above 5975 with strength opens the door toward 6000+. Watch for buyers stepping in above VWAP with strong internals and tech leadership confirming.
Bearish Scenario
If 5941 breaks down with volume, expect a potential pullback toward 5912–5900. Weakness in NQ under 21,300 could trigger early exits from long positions.
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Mindset Tip of the Day
After a powerful bounce, the next best trade is often after the market breathes. Avoid forcing setups in tight consolidation — let the breakout or rejection confirm.
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Shawn