Everything was going as planned Friday morning. The ES was lower for most of the Globex session, then rallied and opened at 6788.00. and immediately pushed up to 6806.75. It pulled back to 6784.00 at 10:20 but stayed in a 10-handle back-and-fill pattern, sitting at the top of the bar at 6796.75 just before 11:00 (Trump’s favorite time). Then it crashed down to 6659.00 at 11:39 — a drop of 136.75 points in 39 minutes.

After the low, the ES bounced back up to 6705.75 at 11:51, then made a series of lower lows, reaching 6641.00 at 1:12. It rallied again to 6673.75 at 1:40 before selling off to a new low of 6603.50 at 3:40. It then traded up to 6633.00, began to tick down, and traded 6623.50 as the 3:50 imbalance showed $2 billion to sell. The ES sold off down to 6591.50 at 3:54, upticked briefly, and then fell to a new low of 6591.75 on the 4:00 cash close.

After 4:00, the ES had a little sideways price action, traded up to the 6607.00 level at 4:20, traded 6601.00 at 4:48, before dropping 60.25 points to yet another new low at 6540.25 at 4:51. It finally settled at 6552.00, down 236 points or -2.71%.

The NQ settled at 24,397.00, down 892 points or -3.53%.

The last time the ES saw a comparable drop was on April 21, when it closed down 2.45%. The last time it fell more was April 10, when it dropped 3.38%. For the NQ, a similar decline occurred on April 16, when it closed down 2.98%, or on April 10, when it fell 4.17%.

In the end, the ES and NQ futures shifted from a quiet grind to a massive sell-off, triggering sell stops, outright selling, and thousands of sell programs. The overall tone of the ES and NQ remained extremely weak right into the 5:00 futures close. Despite the significant move, total ES trading volume was high at 2.55 million contracts, though still lower than expected for such a large decline.

Why October Gets the “Black Swan” Reputation

October has earned a notorious label as the “month of market crashes,” largely due to historic downturns that fuel the psychological “October Effect”—the fear that stocks will decline during this month. However, this is more myth than statistical destiny.

Major crashes, often labeled “Black” days, are outliers—not a predictable pattern. True Black Swans, by definition, are unpredictable, which makes attributing them to October more about hindsight bias than fact.

Key October Crashes:

I’m not saying this is the beginning of a Black Swan event—but I’m also not going to say it’s impossible. The U.S. government has been financed by foreign investors, particularly through Treasury auctions, and all China has to do is start unloading its U.S. Treasury holdings.

We can think what we want, but the U.S. is in bad shape. None of its problems are going away, and some are getting bigger.

OnTap – Fed Speaker Calendar

Monday, Oct 13:

Tuesday, Oct 14:

Wednesday, Oct 15:

Thursday, Oct 16:

Our View

A few days ago, I highlighted how many prominent investors were warning about a market crash. I questioned how so many smart people could be so wrong. Part of the answer is that large investors often predict corrections or crashes that never materialize.

However, this may change in the long run. The U.S. national debt is rapidly approaching $38 trillion (see: usdebtclock.org), the geopolitical environment is deteriorating, the U.S. government is shut down, and political unrest in the U.S. isn’t helping.

While I may not be able to connect all the dots, it’s increasingly clear that the U.S. risks being pulled into a broader conflict in Ukraine. Meanwhile, China’s President Xi Jinping continues expanding influence in the South China Sea and around the world.

I think there are two pivotal moments:

And this weekend, Xi sent a message to North Korean leader Kim Jong-un, signaling that Beijing is ready to strengthen strategic cooperation with Pyongyang on both regional and international issues. It feels like the Indians are circling the wagons.

Despite the tariff extensions, China has taken a firmer stance with the Trump administration—restricting rare earth exports to the U.S. and pressuring TSMC not to sell chips to American companies. Again, I’m not the guy to connect all the dots, but it seems China is no longer bowing to Trump’s threats and is now stepping up its pressure.

Our Lean

I remain a cautious bull, despite skyrocketing stock valuations and historically high complacency.

The PitBull asked me at 3:00 PM what I thought, and I told him they could do anything. I pointed out that after 4:00 on Friday, when the ES fell another 60 points, it was trading at a steep discount to the S&P cash. When that happens, futures usually bounce.

That said, I believe the recent market drop is a reminder of how fast things can unravel.

On Friday, the Magnificent Seven stocks—Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla—were near highs, and then lost a combined $768 billion in market capitalization. Nvidia led the decline with a $243.5 billion loss.

While I remain a bull, I think it’s important to remind myself—and readers—that the U.S. stock market is fighting an uphill battle fraught with risk.

Our lean: After Trump’s “step back,” I think we could see a bounce. This seems to be how it works.

The 50% retracement from Friday’s high of 6806.50 to the low of 6540.25 is 266.25 points, and 50% of that is 133.125, which gives us 6673.375.

While today could get busy, keep in mind it’s Columbus Day, and the banks and bond market are closed. That means customers who had margin calls on Friday won’t be able to wire in funds until Tuesday, adding another layer of concern.

I can do my own support and resistance, but today I’m using @HandelStats levels. Keep an eye on his pivots and standard deviations.

My guess is we’ll see higher prices—the real question is: Will they hold?

I would think 6700–6740 would be a brick wall.

From @HandelStats

INTC Options Setup — Structured Trade Example

Actionable idea for the week

Intel (INTC) designed to capture near-term premium while maintaining longer-term upside exposure.

Sell: Oct 17 36/39 put spread for $2.00 credit
Buy: Dec 19 50 call for $1.00 debit
Net Credit: $1.00
This position establishes a neutral-to-bullish bias with limited downside risk and defined reward. The next step will be to sell an additional put spread next week to continue generating income and manage overall exposure. Of course you can always do one side or the other independently.

More to follow as this trade evolves.

— HandelStats.com
Quantitative data. Structured trades.

Today’s BTS Levels:

ES Z

The bull/bear line for the ES is at 6626.50. This level marks the key pivot that will dictate directional bias for today’s trade. Holding above 6626.50 favors the buyers, while sustained trade below keeps momentum bearish.

Currently, ES is trading around 6685.50 in the Globex session, showing a recovery from last week’s heavy selloff. If the market can maintain strength above the bull/bear line, the next upside targets are 6698.25 (the upper range pivot) and 6766.00, with a stretch target at 6806.50. A sustained push above 6779.50 could open the door toward 6813.50.

On the downside, if ES fails to hold 6626.50, look for support at 6595.25 and 6554.75, our lower range target for the day. A breakdown through these levels exposes deeper downside potential toward 6540.25 and 6487.00.

Overall tone: neutral-to-bullish as long as ES remains above 6626.50. A sustained trade below this line shifts bias back to bearish, targeting the 6550s and possibly sub-6500.

NQ Z

The bull/bear line for the NQ is at 24,547.50. This is the key pivot level that will guide the tone for the session. Holding above this level favors a bullish bias, while trading below suggests continued weakness.

As of the latest Globex session, NQ is trading around 24,856.25, comfortably above the bull/bear line, indicating buyers have regained control after the recent selloff. If the index can sustain above 24,547.50, the next resistance levels to watch are 24,903, the upper range target,  and then 25,237.75. A break above 25,237.75 could open the door toward the previous high at 25,388.

On the downside, initial support sits at 24,397. Below that, the next levels of interest are 24,192, the lower range target, and 24,158.50. A sustained move below 24,158.50 would expose deeper downside potential toward 23,857.

Overall, the tone favors the bulls while above 24,547.50, with an upside bias toward 25,237.75 to 25,388. A break back below 24,547.50 shifts the focus lower toward 24,192 and 24,158.50.

“Follow the plan and you are always right.” – PTGDavid

DTG Room Preview – Monday, October 13, 2025