Inside Day Trap 📉 | Powell’s Speech Shakes ES & NQ (LIVE Trading Room)

All right, let’s take a look at the ES and recap the day. We had a bearish retrace on the day. It was actually an inside day, but given yesterday’s pretty deep bullish expansion, we had a pretty deep bearish retracement. That was technically an inside day, just below the lows of yesterday and a tick or two below the highs of yesterday. So let’s dig into the day. Going through the volume profile, there are a couple of key points to note. I mentioned this in the morning session: we had this big high-volume node right here. The assessment was whether we were going to break above it, hold, and expand further on the day, or break down from it and move lower to fill in the thinner prints. It was really thin this morning before we lapped back through these prints between the two high-volume nodes. On top of that, Powell spoke around midday, starting just after 11:30, right in this area.

There was a nice trade as he started speaking. I’ve got the trade of the day mapped out. Let’s flip this down to a 10-minute to take a closer look. During the pre-market, we failed to take out the prior day’s high and rotated back down, filling the thin prints. Powell started speaking right around here, and we saw a quick bullish surge. On the way down earlier, the bears had been grinding this market lower, down to the bearish level at 6731. As Powell began speaking, we had a sharp pop that trapped a bunch of retail buyers, who quickly got run over as the price plunged below, closed below, and then pushed even lower. On the next candle, we opened, popped higher, trapped more traders, and then flushed them down again. I had a sell stop sitting right here, placed at the close of this candle. Price ripped down through to 6719. I took some partials there and let the runner go, which came all the way down and missed my target by a couple of points before rotating back up. As soon as this flipped green, I exited the trade and closed the runner for another eight points. In total, about a 20-point run on that trade.

Switching over to the NASDAQ, the pattern was much the same today. Overnight we had chop, then a plunging sell-off, breaking down below the aggressive trend stream on the one-hour. We broke through that right during Powell’s speech. Looking ahead to tomorrow, I’m watching three potential pullback areas on the week. We’re at the first now: the prior week’s value area high, around 6700. We’ll see if the bulls can hold that, or if we fail and move lower. The second area is the prior week’s P, and the third—if the pullback gets real deep—is this PC right here. If we break down below 6700 and close below, I’ll look to frame a short off that.

We’ve also got Donald Trump speaking again tonight at 6:20 p.m. Central, so we’ll assess the market impact of that in the morning. With that, have a good night, and we’ll see you then.

Hey everyone, it’s Dale here. I hope you enjoyed the video. If you’d like to trade alongside me and our team of prop firm funded traders every day, then click the link below the video and hop aboard. We’re looking forward to trading with you.