Market Context & Game Plan
Friday Pre-Market Analysis:
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Recap of Yesterday’s Session – A Market in Transition
Yesterday was a battle between buyers and sellers, with ES attempting to hold key support levels but ultimately failing to sustain upside momentum. The 5700 level remains the major battleground, with buyers stepping in, but failing to push higher. Meanwhile, NQ showed relative weakness, unable to reclaim critical resistance levels, making it the laggard in this market.
Adding to the uncertainty, VIX remains elevated, and we have multiple catalysts ahead, including today’s OPEX event, which could create increased volatility and options-driven price swings.
Current Market Context – The OPEX Effect & Volatility Risks
Today is options expiration (OPEX), meaning that large institutional positions may be unwound or rolled over, leading to sharp, unpredictable moves. Historically, OPEX days can see early morning choppiness, followed by directional moves in the afternoon once the positioning is cleared.
Meanwhile, the market continues to digest the FOMC decision from earlier this week. The key points remain:
📉 FED CUTS 2025 GDP Growth Projection – from 2.1% to 1.7%
📈 FED RAISES 2025 Unemployment Forecast – from 4.3% to 4.4%
🔥 Inflation Remains Stubborn – Core PCE inflation forecast raised to 2.8%
The combination of slowing growth, rising unemployment, and persistent inflation is causing concerns about stagflation, making today’s price action critical.
Swiss National Bank (SNB) Rate Cut – Confirmed overnight, adding fuel to global market uncertainty.
Key Levels to Watch for Today’s Session
ES (S&P 500 Futures)
🔸 Resistance – 5700 → 5740 → 5780
🔸 Support – 5650 → 5600 (Critical) → 5550
NQ (Nasdaq Futures)
🔹 Resistance – 19,800 → 20,100
🔹 Support – 19,500 → 19,300
Trading Scenarios for Today
🟢 Bullish Scenario (Above 5700 on ES, 19,800 on NQ)
1️⃣ If ES holds 5700, we could see an attempt to reclaim 5740-5780 as OPEX positioning unwinds.
2️⃣ A move above 5740 with volume could signal a strong Friday rally into the weekend.
3️⃣ Look for relative strength in semis (NVDA) and mega-caps (AAPL, TSLA).
How to Trade It?
✔️ Wait for confirmation above resistance before entering longs.
✔️ Look for dip buys if VIX remains stable and market breadth improves.
🔴 Bearish Scenario (Below 5650 on ES, 19,500 on NQ)
1️⃣ A breakdown below 5650 could trigger increased selling pressure into 5600.
2️⃣ If 5600 fails, expect a potential flush toward 5550, where major buyers may step in.
3️⃣ Tech stocks (QQQ, NQ) remain vulnerable – watch for weakness in high-beta names.
How to Trade It?
✔️ Short weak stocks/sectors if breakdown confirms.
✔️ Watch for fake breakdowns—OPEX volatility could cause sudden reversals.
Final Thoughts & Key Reminders
📌 OPEX Days Are Volatile – Expect unusual price action in the morning before a potential directional move later in the session.
📌 Stagflation Fears Are Rising – Keep an eye on bond yields & the dollar to gauge market sentiment.
📌 Capital Rotation? – Watch for continued strength in Chinese stocks & European markets.
📍 Trade with patience. Avoid getting chopped in the OPEX-driven moves. Let the market come to you.
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Risk Disclaimer
Disclosure:
The information provided in this article is for educational purposes only and should not be considered as financial advice. Trading and investing in financial markets involve substantial risk, and it is important to conduct your own research and consult with a qualified financial professional before making any investment decisions. The author is not responsible for any financial losses or gains that may result from actions
Trading futures, stocks, and options involves significant risk and is not suitable for all investors. This content is for educational purposes only and does not constitute financial advice.