May 2nd – Market Context & Game Plan: The Rally Looks Great… But Is Today the Pause?
After a powerful start to May, the market continues to climb this morning — with fresh optimism fueled by strong data and positive risk sentiment.
Let’s break it down:
Morning Snapshot
SPY is up +1.2%
QQQ up +1.1%
VIX down -7.6%, now hovering around 22%
UVXY has dropped to 28% (down from panic highs of 52)
ES Futures are up +0.4%, trading near 5690
NQ Futures are up +0.62%, testing 20,100
Bigger Picture
This is one of the cleanest follow-through rallies we’ve seen since the market bottomed in mid-April. But the real question today is:
Is this the start of a breakout continuation — or the setup for a distribution day?
With NQ climbing toward 20,100 and ES closing in on the 5,700 zone, we’re pressing into some extended territory.
Let’s add context:
The 200 SMA on ES sits at 5845
The 200 SMA on NQ is around 20,604
While there’s still room above, we’ve covered a lot of ground very quickly — and that usually signals risk of a pause or intraday pullback.
Caution Ahead: Don’t Chase the Green
While the trend is clearly up, that doesn’t mean every candle today should be bought.
Gaps could fill
Profit-taking may appear mid-day
Liquidity may tighten if buyers step away
This might be the first "range day" or even a reversal session in a while — and we’ll only know once we see how price reacts after the first hour.
Key Levels
ES (S&P Futures):
Resistance: 5715 → 5750 → 5785
Support: 5650 → 5605 (gap fill zone) → 5545
NQ (Nasdaq Futures):
Resistance: 20,150 → 20,400 → 20,600 (200 SMA)
Support: 19,950 → 19,800 → 19,400
Scenarios for the Day
Scenario 1: Slow Grind Up
ES holds 5650 and continues upward into the 5700+ zone
Momentum buyers step in post-10AM
Take measured longs on pullbacks only
Scenario 2: Distribution Day
Price chops early or fades post-open
Lower highs form intraday
Watch for failed breakouts → VWAP fades
Look for short entries if structure breaks and we lose VWAP + intraday EMAs
Scenario 3: Gap Fill Reversal
Open is faded hard
Market fills yesterday’s gap (ES toward 5600, NQ toward 19,800)
Patience required to catch the reversal if support holds
Mindset Tip
Today is NOT the day to force the trade.
Wait for confirmation. Let setups mature.
If this turns into a “chop and trap” session — protect your gains from earlier in the week.
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Let’s trade with structure.
Let the setups come to us.
We’ve got the edge — now it’s time to execute.
– Shawn
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.