Still Coiled — Can We Trust the Breakout or Brace for Another Trap?
May 8th Market Context & Game Plan
Good morning traders,
We're now eight sessions into May, and the story of the month so far has been simple: consolidation with a side of confusion.
Despite a historic rally from April’s lows, the market has stalled out in a tight 120-point range on the ES, stretching from 5,600 to 5,723. On the NQ, we’ve similarly danced between 19,400 and 19,850, with no conviction — just reaction.
Even the FOMC meeting on May 7th, which held rates steady and offered few surprises, failed to deliver any decisive move. Instead, we’ve been served a series of bottoming tails on the daily, subtle bounces off the 5/9 EMAs… and then more chop.
This is a trader’s purgatory: not bearish enough to break, not bullish enough to run.
What We’re Watching
The market is searching for a reason to move. And we now have a few catalysts in play that could finally trigger the breakout — or the next trap:
FOMC done — No policy surprises, but still unclear if cuts are coming in Q3
NVDA boost — Chip export restrictions to China appear to be easing, a tailwind for tech
US-China diplomacy — Rumors of renewed talks could be a subtle risk-on signal
And yet… price hasn’t responded decisively.
So far, we’re sitting right at the 5,700 midpoint of the range — and as you know, trading the middle is where traders go to die.
Key Levels to Watch
For ES Futures (ESM5):
Support Zone: 5,600–5,640 — multiple touches, bottoming wicks
Breakdown Trigger: Below 5,600 opens door to 5,520 and 5,460
Breakout Zone: 5,723+ could push us quickly to 5,755, 5,800, then 5,850 (200SMA)
For NQ Futures (NQM5):
Support: 19,400–19,480
Breakdown: Lose 19,400 → 19,100 in play
Breakout: Above 20250 → upside runway to 20,400+
Today’s Setup Scenarios
Scenario 1: Bullish Breakout
If we get a volume-led breakout above 5,723 (ES), look for continuation trades with pullback entries near the breakout level. Use NQ confirmation above 19,850.
Scenario 2: Range Rejection + Trap
A fake-out move above the range that quickly snaps back into the range? Fade that. If we break 5,723 and fall back under 5,700 with heavy volume — look short for a range reversal.
Scenario 3: Breakdown Below 5,600
Clear flush below 5,600 and especially 5,580 may signal that the bid is gone. Expect liquidation flows toward 5,520 or deeper.
Mindset Check
This week has been a minefield:
• FOMC head-fake
• Earnings noise
• Rumors of policy easing
• Low conviction participation
When the market gives you noise, you lean on structure.
That’s why we’ve focused on clear levels, measured responses, and not predicting, but preparing.
If You Missed It…
This kind of structure is exactly what we teach in our playbooks.
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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.