Our View

What’s the old song? Train Keeps A-Rollin’ All Night Long? Well, despite a laundry list of economic problems, the government shutdown, skyrocketing geopolitical risk, and tariff problems, the S&P and Nasdaq keep going higher.

The active front-month ESZ25:CME S&P future made an April 7 tariff low at 4932.00 and traded up to 6990.00 on Globex Sunday night — a 2,058-point or +41.73% move from its low. The (NQZ25:CME) Nasdaq future made its low on April 7 at 16,873.00, and Sunday night’s Globex high at 27,768.25 marking a rally of 10,895.25 or 64.60%. The Dow futures (YMZ25) made a low on April 7 at 37,351.00 and traded up to 47,775 on Globex, rallying 10,424 points for a gain of 27.91%.

At 7:25 ET Friday morning, the ES made a Globex high at 6798.75 and was trading around the 6794 area when the 8:30 ET CPI number was released. The ES ripped through the stops I talked about in the LEAN, through the 6812.25 contract high, and traded up to 6835.25.

It pulled back to 6810.00, made a series of higher lows that pushed the ES up to 6835.75 at 10:06, made two higher lows at 6817.50 and 6815.50 at 10:55, traded up to 6841.25 going into 11:30, pulled back to a 6828.50 double bottom at 12:45, rallied up to 6841.00 at 1:48, back-and-filled for the next forty-five minutes, traded 6833.50, and traded back up to 6841.00 at 3:12.

The ES traded 6840.75 at 3:25, sold off down to 6831.00 at 3:48, traded 6833.15 as the 3:50 cash imbalance showed $1.9B to sell and traded 6827.25 on the 4:00 cash close. The ES settled at 6827.00, up 52 points or +0.77%, or up 90 points in the last two sessions.

The NQ settled at 25,209.25, up 255.25 points or +1.01% on the day or up 470 points. The YM traded up to 47,500 the first time on Friday, closing up 2.5% for the week. The ES and NQ composite logged their second straight weekly gains, with the S&P 500 up 16%, and the NQ up 20.68% YTD.

In terms of the ES’s overall tone, it’s been follow the leader the last two days — the NQ. In terms of the ES’s overall trade, volume was lower at 1.2 million contracts traded.

On Tap for the Final Week of October

10/27 Monday

Start of APEC Economic Leaders Week 2025 in South Korea

10/28 Tuesday

96th Anniversary of the 1929 CRASH (-23% Oct 28 & 29)
Day 1 Fed Two-Day Meeting

10/29 Wednesday

2:00 — Day 2 FOMC Interest Rate Decision
2:30 — Fed Chair Powell press conference
4:00 — After the Bell: MSFT, GOOGL, META
Trump/Xi meeting will take place late Wednesday evening

10/30 Thursday

9:55 — Fed Vice Chair for Supervision Michelle Bowman speaks
4:00 — After the Bell: AAPL and AMZN

10/31 Friday

Halloween and the last trading day of October
9:30 — Dallas Fed President Lorie Logan welcoming remarks
12:00 — Cleveland Fed President Hammack and Atlanta Fed President Bostic speak

Our View

While there is going to be an uptick in geopolitics this week, there are also some big-weight names reporting earnings on Wednesday and Thursday: MSFT, GOOGL, META (Wednesday), AAPL, and AMZN (Thursday), representing 25% of the S&P 500’s weighting.

When you throw in the new all-time highs and the headline exposure, this could end up being another volatile week.

The only thing I have to say is that the on-again, off-again Trump/Xi meeting doesn’t mean they are going to kiss or hold hands. China does not want to supply rare earth to its largest competitor and military enemy. I know U.S. Treasury Secretary Scott Bessent and his Chinese counterpart have held multiple rounds of talks to establish a framework for the leaders’ discussion, but I don’t think there will be any win-win deal.

Below are two posts from X. The first post from @PeterMallouk shows what happens when you don’t sell into declines. The other, from @KobeissiLetter, shows how much the “Spooky Month of October’s” monthly gain was.

The only thing I can say — DON’T FIGHT THE FED!!!!

@PeterMallouk · Oct 13
The S&P 500 has returned an average of 11% per year since 1950 and has done so despite an average intra-year drawdown of 14%, and often drawdowns that are much worse. The lesson? Volatility doesn’t equal a permanent financial loss unless you sell.

@KobeissiLetter · 3h
Just alone, the S&P 500 has now added +$3 TRILLION since its October 10th low after President Trump’s 100% China tariff was announced. This is the most profitable market of all time.

Our Lean

At the end of last year and all this year, I said I thought the ES was going to 6900.00, and as of last night’s Globex high at 6890.00, it’s only 10 points away. This is not so much about being right as it is about the market continuing to go up.

I’ve pointed out several times how all the banks have adjusted their year-end S&P price estimates:

Most of the banks have been way off.

The last time the Federal Reserve set the federal funds target range at 3.75%–4.00% was on November 2, 2022, following a 75 basis point hike from the prior range of 3.00%–3.25%. This was during the aggressive rate-hiking cycle to combat inflation, and the range was raised further to 4.25%–4.50% on December 14, 2022.

As for today, the ES is too high to buy and too firm to sell. As I pointed out, the return of Mutual Fund Monday has come back with a vengeance — the ES has been up 9 Mondays in a row.

Our lean: I can’t rule out trying to sell an early rally, but the price action speaks for itself — buy the pullbacks.

Today’s BTS Levels:

ES Z

The bull/bear line for the ES is at 6819.75. This level serves as the key pivot for today’s session. Trading above it keeps the short-term tone bullish, while sustained action below it turns the outlook bearish.

Currently, ES is trading around 6885.75 during the Globex session, well above the bull/bear line. As long as price holds above 6819.75, buyers remain in control with potential upside targets at 6864.25 and 6906.00. These mark the upper range and resistance levels for today.  If this gap holds, treat 6864.25 as a bull bear line for intraday trading. 

If ES fails to hold above 6819.75, expect a pullback toward 6775.25 as the lower range target. A break below 6775.25 could extend the decline toward deeper support near 6733.50.

Overall, the bias remains bullish above 6819.75 with upside focus toward 6906.00. A move back below 6819.75 would neutralize the near-term strength and open the door for rotation back to lower supports..

NQ Z

The bull/bear line for the NQ is at 25,475.00. This level serves as the key pivot for today’s trading sentiment. Holding above this mark maintains bullish momentum, while a sustained move below it would shift the tone to bearish.

Currently, NQ is trading around 25,828.75, well above the bull/bear line, suggesting strong overnight buying pressure. If the market can hold this strength, the next resistance target sits at 25,921.00, which represents our reach target for the day. A breakout above that level could open the path toward 26,000.00 and potentially 26,120.00 in extended trade.

On the downside, initial support comes in at 25,704.75. A break below that level would likely target 25,570.75, followed by deeper support around 25,509.25 and the bull/bear line at 25,475.00. A failure there would expose 25,276.00 and 25,245.00 as the lower range targets.

Overall, the bias remains bullish above 25,475.00, with buyers in control while price holds above that zone. A move below it would suggest fading momentum and the potential for a pullback into the 25,300 area.

DTG Room Preview – Monday, October 27, 2025