Will This Be the Pause Before a Surge — or the Top Before the Drop?
Market Context & Game Plan - May 5
This Week Could Define Your Quarter — Don’t Trade It Alone
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After one of the strongest rallies of the year — a staggering push from ES 4860 to 5,700 — the market opens this Monday morning on pause. A pullback has begun, but it’s not yet a panic — it’s a market catching its breath before one of the most pivotal weeks of the quarter.
We’re now entering a tight consolidation window, with price chopping just beneath Friday’s highs. The question on every trader’s mind is:
👉 Is this just digestion before another leg higher? Or the beginning of a broader reversal fueled by policy and macro risk?
if you have not checked the weekly recap, click here to review
Let’s break it down.
Morning Snapshot
SPY: -0.80%
QQQ: -0.96%
ES Futures: Down ~0.15%, hovering near 5,665
NQ Futures: Down ~0.35%, trading around 20,000
After last week's vertical move off the lows, we’re starting the week with markets slightly red, but still well within the post-rally structure
.
Macro Context – Why This Week Matters
This isn’t just a typical Monday. We’re staring down a stacked macro calendar, including:
FOMC Rate Decision (Wednesday)
Major employment & wage data
Ongoing noise around tariffs, China, and trade policy
Potential Fed speak and earnings commentary
Markets are forward-looking, but when price action pauses ahead of key catalysts, it tells us one thing: uncertainty is peaking.
That’s where context gives us edge.
Current Technical Structure
After surging off the bottom and reclaiming broken trend lines, both ES and NQ are extended. But they haven’t broken down — they’re just stuck in short-term digestion ranges.
ES: Trading in a narrow band between 5,656 – 5,675 this morning
NQ: Stuck between 19,963 – 20,080, with a critical test of 20,000 in progress
What we’re seeing is an increasingly compressed volatility pattern, and when these break — they often break big.
Key Levels to Watch Today
S&P 500 Futures (ES)
Resistance: 5,680 → breakout could retest 5,720 and 5,750
Support: 5,610 → a flush here puts 5,500 back in play
Critical pivot zone: 5,656–5,675 → expect chop and false moves inside this box
Nasdaq Futures (NQ)
Resistance: 20,100 → needs conviction to continue trend
Support: 19,700 → breakdown opens door to 19,100
Range for now: 19,960 to 20,080
Trading Scenarios for May 5th
Scenario 1: Trend Continues
If the market reclaims ES 5,680 and NQ 20,100 with strength and volume, we likely see a continuation of the rally into FOMC. The path higher isn’t clean — but momentum buyers may step in again if levels confirm.
Scenario 2: Failed Break & Pullback
If the price fails to hold ES 5,656 and loses NQ 19,960, it could trigger a more aggressive pullback to 5,610 (ES) and 19,700 (NQ) — both of which were demand zones during last week’s launch.
Scenario 3: Inside Day Chop
The most likely early session scenario: tight range chop as markets digest macro uncertainty and position into the Fed. If no breakout by 11 AM, traders should shift focus to mean reversion and liquidity traps.
Mindset Tip: Don’t Predict, Prepare
The market is still trending, but it’s also extended and fragile. This is not the time to force trades or chase. The best trades today will likely be reactions to key zones — not predictions of breakouts.
When in doubt, let levels lead. Focus on clean structure, not noise.
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Let the levels guide you.
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— 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.
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