Fighting the Tape, Losing the Edge

Author

Danny Riley
May 20, 2025

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One of the things about me? I admit when I’m wrong — and yesterday, I was DEAD wrong.

Over the last week or so, I’ve made both good and bad calls, but even on the days with the good calls, I ended up on the wrong side. The higher the ES goes, the harder it’s been for me to trade. I’ve been on a losing streak, and instead of just sticking with the last 2+ weeks of early sell-offs and rallies, I should’ve followed the price action and bought the pullbacks. But I’ve been totally thrown off by the speed and size of the up move AND the lack of pullbacks. Hell, I didn’t even suggest buying yesterday’s open or the early weakness — that’s totally out of character, even if it ends up a losing trade.

Rough patches in trading are never fun. Sometimes you wonder if this is the job you were meant to be in, but it’s really the only job I’ve ever known. That said, the trading world has gotten a lot harder. You have to be able to switch gears quickly. You need to think like an algo — buying when the public is selling and selling when everyone is buying. But buying when the ES is up 15 of the last 18 sessions, with one of the down days only off 6.5 points, is not easy.

Despite the Moody’s credit downgrade, the markets rallied, but Treasury yields rose from last Friday’s settlement level. Thirty-year yields touched 5%, lifted by unease about U.S. government borrowing, before retreating to about 4.937%. The 10-year yield rose to 4.473%. Gold set a new record high, and Bitcoin closed above 106,000. The dollar weakened and has tumbled as much as 10.6% from its January highs — one of the sharpest retreats in a three-month period — leaving speculators net short the dollar to the tune of $17.32 billion, close to the most bearish position on the buck since July 2023, according to CFTC data.

As the saying goes, everything is moving.

There are no scheduled economic reports today, but at 9:00 AM, Richmond Fed President Tom Barkin speaks. At 9:30 AM, Boston Fed President Susan Collins participates in a Fed Listens event. At 1:00 PM, St. Louis Fed President Alberto Musalem speaks, and at 5:00 PM, Federal Reserve Governor Adriana Kugler delivers a speech.

MiM and Daily Recap

The ES dipped from a pre-market high of 5918.75 at 9:00 AM down to 5902.50 at 9:15 AM. From there, buyers stepped in and carried the market higher through the 9:30 AM regular session open. The rally extended steadily into the morning, ultimately reaching a morning session high of 5964.75 by 10:15 AM, marking a 62.25-point advance off the pre-open low.

A shallow retracement followed, with prices pulling back to 5946.50 at 10:25 AM before the market resumed its climb. The next leg of the uptrend peaked at 5987.50 at 1:10 PM, establishing the session high with a 41.00-point push from the prior pivot low.

The afternoon trade saw a fade begin, with ES slipping to 5965.00 by 2:15 PM, then making a lower high of 5978.50 at 3:00 PM before dropping again to 5962.75 at 3:25 PM. A modest bounce into the final minutes brought ES back to 5980.50 at the 4:00 PM close.

On a session-over-session basis, the full session gained 6.00 points (+0.10%), with most of the day’s strength occurring during the regular trading hours. The regular session itself closed 69.00 points higher from the open (+1.17%), while the Globex session had been notably weak, shedding 63.00 points (-1.05%) from Sunday’s close to the Monday morning handoff.

The overall tone was bullish during the regular session, reversing a negative overnight narrative. Buyers showed strong interest early and sustained it through much of the day, even as momentum waned slightly in the final hour.

Volume during regular hours was light at 923,202 contracts. Total volume for the day was a modest 1,184,738 contracts.

The Market-on-Close (MOC) imbalance leaned heavily toward buyers, peaking at $2.693B to buy at 3:50 PM. While the dollar imbalance was significant (74.5% buy), the symbol imbalance came in at 62.5%, just under the 66% threshold for a strong directional cue. The imbalance helped stabilize prices in the final minutes and gave a decent 10-point push, but did not spark a late surge.

With the ES holding near highs and recovering strongly from early weakness, the session closed with a constructive tone. Continued strength above the 5980 area could set the stage for further upside as the week progresses.

Technical Edge 

MrTopStep Levels:

Fair Values for May 20, 2025:

  • SP: 17.53

  • NQ: 72.01

  • Dow: 93.06

Daily Market Recap 📊

For Monday, May 19, 2025

• NYSE Breadth: 42% Upside Volume
• Nasdaq Breadth: 52% Upside Volume
• Total Breadth: 51% Upside Volume
• NYSE Advance/Decline: 44% Advance
• Nasdaq Advance/Decline: 50% Advance
• Total Advance/Decline: 48% Advance
• NYSE New Highs/New Lows: 75 / 17
• Nasdaq New Highs/New Lows: 140 / 66
• NYSE TRIN: 1.02
• Nasdaq TRIN: 0.76

Weekly Breadth Data  📈

Week ending Friday, May 16, 2025

  • NYSE Breadth: 63% Upside Volume

  • Nasdaq Breadth: 67% Upside Volume

  • Total Breadth: 66% Upside Volume

  • NYSE Advance/Decline: 76% Advance

  • Nasdaq Advance/Decline: 71% Advance

  • Total Advance/Decline: 73% Advance

  • NYSE New Highs/New Lows: 175 / 63

  • Nasdaq New Highs/New Lows: 334 / 266

  • NYSE TRIN: 1.76

  • Nasdaq TRIN: 1.20

Trading Room Summaries

Polaris Trading Group Summary - Monday, May 12, 2025

Overview:
Monday opened with a bearish tone after Friday’s OPEX and Moody’s U.S. debt downgrade. However, despite the weak overnight session, the bulls made an impressive stand early and controlled much of the AM session, leading to several successful long trade setups. The afternoon presented more two-way price action with key lessons on understanding levels and managing trades through different sessions.

🔹 Key Events & Trade Highlights:

  • Gamma & Technical Prep:

    • Overnight price action sold down to the Gamma Guys’ Put Wall at 5875–5893, where buyers stepped in.

    • PTGDavid noted the importance of reclaiming the 5923 CD1 Low — a level that became pivotal in the morning's bullish recovery.

  • Morning Session (AM):

    • Once 5923 was reclaimed, bulls gained momentum. Multiple targets were hit:

      • NQ Opening Range Long – Target 1 filled early.

      • A4 Long (from 8:30) – Two targets fulfilled; runner managed successfully.

      • ES & NQ Open Range Longs – All targets filled.

    • Key Level: 5950 (Line in the Sand) – Once reclaimed, it confirmed bullish strength.

    • Bull target zone of 5965–5970 fulfilled mid-morning — textbook execution of the “Bull Scenario” posted earlier by PTGDavid.

  • CL Trade:

    • The CL Open Range Short was stopped out, highlighting the need to adapt when broader market strength overrides setups in individual futures contracts.

  • Afternoon Session (PM):

    • Afternoon rhythm shifted to more two-way action, as expected.

    • Bulls attempted to push above 5977.50 PH, but the D-Level stalled progress.

    • A brief pullback followed, but bulls held IB High (5965) – the updated Line in the Sand.

    • Despite efforts, bulls couldn’t sustain above PH. Price faded before the close.

    • MOC Buy Imbalance of $3.1 Billion emerged but was largely absorbed by the market.

Lessons & Takeaways:

  1. Respect the Gamma Map: The bounce off the 5893 Gamma level and the reaction near 5905 SPX gamma strikes reinforced how institutional levels shape price behavior.

  2. Predefined Scenarios Pay Off: The "Bull Scenario" posted early was fulfilled step-by-step — highlighting the value of preparing trade plans based on key levels.

  3. Morning Edge: Consistent with PTG’s philosophy, the best trade rhythms occurred in the AM session, with clean execution and stronger directional conviction.

  4. Adaptability is Key: Afternoon trades required more nuance, particularly as the D-Level acted as resistance and bullish momentum waned.

Positive Trades of the Day:

  • A4 Long (ES) – Two targets hit and a well-managed runner.

  • NQ & ES Open Range Longs – Full target completions.

  • Bull Scenario (5950 reclaim > 5965–5970) – Hit precisely as forecasted.

Final Note:
A solid Monday with disciplined execution, clean levels, and sharp trade planning. AM session once again provided the highest-quality setups, emphasizing the importance of aligning trades with market tempo and gamma dynamics.

Discovery Trading Group Room Preview – Tuesday, May 20, 2025

  • Macro Risk Sentiment: JPMorgan CEO Jamie Dimon and Citigroup’s Jane Fraser both voiced concerns about the underestimated impact of current tariffs and a shifting global economic order. Fraser pointed to a broader confidence shock impacting asset flows, with investors increasingly hedging USD exposure and reallocating capital to Japan, India, and Europe.

  • Trade Impact: Apple iPhone shipments from China hit the lowest level since 2011. Port of LA data confirms a steep May decline in inbound shipments (-30%), reversing April’s rush (+9.4%) ahead of tariff enforcement. This downturn is disrupting logistics and labor on the West Coast.

  • Policy & Fiscal Debate: The Trump administration is clashing with leading think tanks over its tax policy claims. Critics argue that without pandemic-related fiscal injections, revenue performance would not support the administration’s narrative.

  • Market Internals:

    • Corporate Earnings: Premarket – HD, AS, ESLT, HTHT, VIK; After the bell – PANW, TOL, JHX, KEYS, ZTO.

    • Volatility: ES 5-day ADR has contracted to 70.50 points.

    • Technical Levels:

      • Resistance: 5988/93, 6011/16

      • Support: 5891/96, 5880.25 (200-day MA), 5672/77, 5288/93, 4962/67

  • Fed Watch: Barkin and Bostic at 9:00 AM ET, Musalem at 1:00 PM ET.

  • Flow: Overnight volume showed light bearish activity—no significant whale bias.

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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!