I do my very best not to change the “lean”. If I call it right, it sets the tone for my trading for the day. As we all know, I like trading the gaps, but Friday’s gap sharply lower gave the ES its high on the open, and yesterday’s big gap-up-and-go was not what I was looking for. I knew the risks going into it. I started writing about end-of-July weakness and warned about July month-end and early August weakness the week before the declines.

Most of last week’s weakness started on Monday when the ES closed down -0.04%, then fell -0.26% on Tuesday, -0.37% on Wednesday, -0.34% on Thursday, and down –1.69% Friday — or down -2.66% on the week. It was a pretty negative week and down hard on Friday, but ended with $2.6 billion to buy.

The last time the S&P closed down several days in a row was April 12–17, 2024, as part of the five-day losing streak ending April 18, 2024, which lost 2.8% and then rallied 3.85% over the next five sessions. The point being — after a five-day sell-off, the ES rallied 3.85% over the next five sessions.

After falling 1.8% on Friday, August, the S&P rallied 1.5% after losing 1.69% on August 1. The NQ closed down 2.06%, then gained 2%, and another $2.445 billion to buy on yesterday’s close.

It really looked like there was going to be more of a pullback, but a bleak economic background got energized by hopes the Fed will cut rates this year, as traders continue to deal with Trump’s ever-shifting headlines. Traders are also pressing through Q2 earnings season. So far, the S&P has reported about two-thirds of its 500 companies. According to FactSet, over 80% reported better-than-expected earnings per share, including some of the tech heavyweights: META, GOOG, and MSFT.

In the end, it’s been a tale of two cities — a big down day Friday and almost a full recovery yesterday. I wasn’t looking for it, but even the PitBull said the charts are “nuts.” In terms of the ES and NQ’s overall tone, the move back up with little to no pullbacks was stunning. In terms of the ES’s overall trade, volume was almost 700k contracts, low compared to Friday’s volume of 1.29 million contracts traded.

On Tap

This morning, we have two economic reports: the U.S. trade deficit at 8:30 ET and the S&P PMI at 9:45.

Pfizer (PFE) will release its Q2 2025 earnings before the market opens today. Caterpillar (CAT) is set to announce its Q2 2025 financial results at 6:30 a.m. EDT. Duke Energy (DUK) will post its Q2 2025 financial results at 7:00 a.m. EDT. Eaton Corporation (ETN) will announce its Q2 2025 earnings before the opening of the New York Stock Exchange. Finally, Advanced Micro Devices (AMD) will report its Q2 2025 earnings after the market closes today.

Our Lean

The charts I posted are of Thursday night’s Globex session into Friday’s close and Sunday night’s Globex session into Monday’s close. I make no excuses — I’ve had a hard time maneuvering. There are no shoulda, woulda, coulda’s in trading; you either make the right choices, or you end up on the wrong side, and no one likes that. And it’s not so much about the losses; it’s the missed opportunities we all look for once the markets go from 30-point ranges to 125 points.

Our lean: As of this morning’s 6377.00 Globex high, the ES is up 137.5 points off Friday’s 6239.50 low. The 50% retracement from the ES contract high at 6468.50 to Friday’s 6229.50 low is 229 points, putting the 50% level at 6349.00. The 38.2% retracement is 6377.202, which is also this morning’s early Globex high. The 23.6% retracement comes in at 6412.10.

On the downside, the 38.2% retracement is 6320.798, and the 23.6% retracement is 6285.904. I’m not going to mess with the gaps for a few days and will just trade the levels and buy the pullbacks.

ES – Levels

The bull/bear line for the ES is at 6337.75. This is the critical pivot that defines directional bias for today. Holding above this level favors bullish continuation, while trading below it opens the door for further downside.

Currently, ES is trading at 6371.75, showing a reclaim of the bull/bear line and printing back above yesterday’s close of 6356. The first upside magnet is the prior high at 6370, followed by the upper range target at 6411.25. Beyond that, resistance sits at 6458.75 and 6480.50, where sellers may step in.

On the downside, if ES loses 6337.75 again, we look for support at 6264.25 and 6251.25, today’s lower range targets. A failure there could open the door to deeper downside toward 6194.50.

Reminder, we are still in a long-term bullish trend.

NQ – Levels

The bull/bear line for NQ is at 23,212.75. This is the key pivot level for today. As long as price remains above this level, the market retains a bullish intraday tone. If NQ trades below it, downside momentum may resume.

Currently, NQ is trading around 23,372.75, which is above the bull/bear line, signaling a modestly bullish bias in the Globex session. If this strength holds, the immediate upside target is 23,551, today’s upper range target. A breakout above this level could open the door to further resistance at 23,637.75 and 23,869.50.

On the downside, first support sits at 23,296.50. A failure to hold above that could shift the bias back to neutral. Below the bull/bear line, look for sellers to press toward 22,874.50 and 22,821.75, our lower range targets. Breaching these levels could trigger additional liquidation.

Reminder, we are still in a long-term bullish trend, but short-term control hinges on holding above 23,212.75.

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