Market Context and Game Plan – March 26, 2025
Hey Traders,
Today’s market is showing very slow price action, similar to yesterday. The market has been grinding up with little momentum, and the price action continues to remain slow. Here's what we need to focus on for today:
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Overnight Market Action:
Market Behavior: The overnight session was gapping down, much like yesterday. However, similar to the previous session, buying started around 6:00-7:00 AM, pushing the indices slightly into the green. This has been a common pattern over the last couple of days.
Slow Price Action: Despite the buying, price action has remained slow, both in the ES (S&P 500 Futures) and NQ (Nasdaq Futures). The whole session yesterday was confined to a 30-35 point range, and we are seeing a similar trend today. This is making it difficult to capture larger, fast moves, and could result in smaller, more controlled trades.
Key Technical Levels and Analysis:
200 SMA: Both S&P 500 and Nasdaq are coming close to their 200 SMAs. The S&P 500 has already moved above its 200 SMA and is holding steady above the 21 EMA. On the other hand, QQQ is still below the 200 SMA, but it could break above 494.50 if the buying momentum continues. Watch for a clean breakout or rejection at these levels.
Resistance and Support Zones:
ES: The resistance levels at R3 (5827.75) and R4 (5840.725) are crucial to monitor for a potential breakout. The S3 level at 5791.13 will act as support if the market pulls back.
NQ: Key resistance levels are around R3 (20415.319) and R4 (20420.00). If QQQ clears 494.50, we could see a more significant move up, but until then, be cautious of potential sideways action or slow grind.
Economic Data to Watch:
Today’s Data:
FHFA Housing Price Index (Jan): Modest impact expected.
S&P Case-Shiller Home Price Index (Jan): Could provide insight into housing market trends.
Consumer Confidence (March): A key indicator of consumer sentiment.
New Home Sales (Feb): Will provide a gauge on the housing market's health.
This Week's Key Data:
GDP Data (Q4): This will be a major data point tomorrow. The market is reacting to the possibility of lower GDP estimates due to political and tariff impacts. A deviation from the expected GDP number could trigger market volatility.
Initial Claims: Another important data release tomorrow that could impact market sentiment.
Mastering Market Context
·Mastering Market Context: The Pro Trader’s Guide to Reading Price Action & Liquidity
Market Context:
Slow Movement: Despite the slight grind up, the market has not shown significant momentum. With the economic data coming up, the market may remain cautious today. We're seeing a lack of strong volatility, and the small price ranges are not ideal for traders who typically look for fast, explosive moves.
Watch for the 200 SMA: The 200 SMA has been an important level, with the S&P 500 already above it, and NQ still below. A clean break above the 200 SMA for NQ could be a catalyst for further upside, but we must be cautious as the ranges remain tight.
Today’s Game Plan:
Bias: The overall bias remains neutral to slightly bullish, but the market is moving slowly. There could be opportunities in small breakouts, but we need to stay patient and avoid chasing price action.
Risk Management: With slow price action, it’s essential to focus on small trades and tight risk management. Since the market is holding near key moving averages, be cautious of false breakouts or rejections. Keep stops tight and watch for reactions at key levels.
Entry Ideas:
Support and Resistance Bounces: Look for entries around support zones (e.g., S3 at 5791.13 for ES and 20278.15 for NQ) for higher-low setups.
Breakout Plays: If NQ breaks above 494.50 or ES clears resistance at R3, look for upside continuation, but ensure the move has momentum and volume to avoid false breakouts.
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.