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From Rally to Drift: ES Faces First Pullback in 9 Days
Danny Riley
May 06, 2025
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MiM and Daily Recap
The ES began Monday's Globex session at 5705.25 and dropped swiftly to a low of 5655.25 at 5:00 AM ET. This overnight drop of 41.50 points (-0.73%) set the stage for early weakness heading into the regular session.
The cash session opened at 5664.25, and buyers attempted to stabilize the tape. An early morning low was established at 5659.00 at 8:45 AM, followed by a rebound to 5671.00 at 9:35 AM, marking a modest 12.00-point rally. However, that push was quickly rejected, sending ES to the regular session low of 5655.25 by 9:50 AM. This formed a double-bottom against the Globex low.
From there, a stronger recovery emerged. The market climbed steadily through the late morning, tagging a higher high at 5692.25 at 11:20 AM—a 37.00-point rally off the prior low. After a brief pullback to 5677.25 at 11:35 AM (-15.00 points), the uptrend resumed. ES advanced to 5698.75 by 12:50 PM, then saw a modest retreat to 5687.25 at 1:15 PM before pushing higher once more into the afternoon.
The day’s peak came at 2:40 PM when ES hit 5706.25, up 51.00 points from the mid-morning low and briefly back above Friday's settlement. However, this late push failed to hold. A sharp afternoon reversal began, eroding gains rapidly into the close. Sellers drove the market lower into the final hour, culminating in a late-session low of 5665.25 at 4:30 PM, down 41.00 points (-0.72%) from the day’s high.
The regular session closed at 5674.50, up 10.25 points from the open (+0.18%), but still down 31.50 points (-0.55%) from Friday’s 5706.00 cash close. Cleanup trade slightly trimmed gains, ending at 5671.25.
The overall tone was mixed with early downside follow-through from Globex weakness, followed by steady recovery during the morning and early afternoon. While bulls managed to regain some control intraday, the late-day reversal wiped out much of the progress.
Volume in the regular session reached 763,447 contracts, with the full session totaling 952,959, reflecting lighter participation throughout the day. The most notable move came late in the afternoon as the rally faded and sellers pressed into the close.
The MiM (Market-on-Close) imbalance was not a significant directional driver. At 3:51 PM, the total imbalance was $1.092B to buy, representing 59.9% of dollar flow, below the 66% threshold for strong conviction. Symbol imbalance ended at 53.8% buy, showing moderate skew but not enough to sustain the rally. Despite this, the closing trade action was notably heavy on the sell side in the final minutes.
In summary, the ES posted a session of two halves: an orderly midday climb and a sharp late-day retreat, closing lower versus the prior session and leaving a neutral-to-bearish tone heading into today.
Technical Edge
MrTopStep Levels:
Fair Values for May 6, 2025:
SP: 20.55
NQ: 87.27
Dow: 98.59
Daily Market Recap 📊
For Monday, May 5, 2025
NYSE Breadth: 35% Upside Volume
Nasdaq Breadth: 43% Upside Volume
Total Breadth: 41% Upside Volume
NYSE Advance/Decline: 33% Advance
Nasdaq Advance/Decline: 36% Advance
Total Advance/Decline: 35% Advance
NYSE New Highs/New Lows: 55 / 29
Nasdaq New Highs/New Lows: 107 / 66
NYSE TRIN: 0.81
Nasdaq TRIN: 0.75
Weekly Breadth Data 📈
Week ending Friday, May 2, 2025
NYSE Breadth: 59% Upside Volume
Nasdaq Breadth: 69% Upside Volume
Total Breadth: 65% Upside Volume
NYSE Advance/Decline: 72% Advance
Nasdaq Advance/Decline: 67% Advance
Total Advance/Decline: 69% Advance
NYSE New Highs/New Lows: 96 / 72
Nasdaq New Highs/New Lows: 215 / 216
NYSE TRIN: 0.71
Nasdaq TRIN: 0.54
Trading Room Summaries
Polaris Trading Group Summary - Monday, May 5, 2025
Overview:
Monday marked the start of a new Cycle Day (Cycle Day 1), and PTGDavid guided the room through a textbook decline rhythm, consistent with expectations outlined in the Daily Trade Strategy (DTS). The session featured disciplined execution around key levels, successful target zone fulfillment, and valuable intraday commentary, making it a productive and instructive day for PTG traders.
Key Highlights:
Pre-Market Setup:
PTGDavid shared the daily strategy links and tools early, highlighting that both ES and NQ had already fulfilled their initial downside targets in the overnight session—a strong early confirmation of the DTS framework.Cycle Day 1 Dynamics:
As expected for CD1, a decline was anticipated, and the market respected that rhythm throughout the day. Early action saw price oscillating within the Open Range (60–70), later confirming bearish control.Trade Execution and Setups:
Slatitude39 reported following an ATR 10 short at 5680, aligning with the DTS bearish bias.
PTGDavid called a "Dip n Rip" move late morning, warning traders of manipulation designed to trap weak longs.
A VWAP resistance rejection at the Open Range High and inability to hold above 580–585 led to a shift in sentiment, setting up for a Gap Fill play.
By mid-afternoon, David confirmed the gap was filled, and later the Globex Open Price was tagged, which became a key pivot point for liquidity targeting.
Late Day Action & Lessons:
With the Globex Open filled, David noted buyers vanished and sellers pressed toward 5685 liquidity, which was accurately predicted and confirmed in real-time (“Boom...There's your liquidity grab @ 5685”).
His commentary emphasized liquidity-driven moves, manipulation awareness, and cycle pattern recognition—crucial takeaways for traders.
Lessons Learned:
Respect the DTS Framework: Both NQ and ES fulfilling initial downside targets gave confidence to the DTS projections.
Cycle Rhythm Recognition: Textbook CD1 price action reaffirmed the importance of aligning with expected cycle behavior.
Liquidity Awareness: Watching key levels like Globex Open and gap zones helped time entries and exits effectively.
Avoiding FOMO/Chase: David's note that "all the FVG players on screwtube got shut out" was a caution against overhyped strategies not aligned with the day's structure.
Overall:
A solid session for PTG traders, with clear setups, fulfilled technical targets, and precise market reads. PTGDavid’s real-time guidance helped the room stay on the right side of the trade and highlighted the value of structure-based trading.
Discovery Trading Group Room Preview – Tuesday, May 6, 2025
Market Pullback & Trade Optimism Cools
S&P 500 dropped 0.6% Monday, ending its longest winning streak in over 20 years.
Optimism over potential US-China trade talks has stalled — no formal negotiations yet.
New Trade Front: Movie Tariffs
Trump announced plans for 100% tariffs on foreign-produced films to protect Hollywood.
Media stocks including Netflix (NFLX), Warner Bros. Discovery (WBD), and Paramount (PARA) fell ~2%.
Fed in Focus
The Fed begins its May policy meeting today, with a decision expected Wednesday.
Rates are expected to remain steady despite Trump’s pressure to cut.
Corporate Impact of Trade Tensions
Ford: Beat Q1 earnings but pulled guidance due to a projected $1.5B tariff hit and rare earth material concerns.
GM: Warned of a possible $5B tariff-related cost by 2025.
Mattel: Moving production out of China, raising prices to offset tariffs; still sources ~60% of its US imports from China.
Earnings Lineup
Premarket: Marriott (MAR), AEP, ADM, BALL, BAM, CEG, DDOG, and others.
After Hours: AMD, Super Micro (SMCI), Rivian (RIVN), EA, SU, and more.
Economic Calendar
Trade Balance report due at 8:30am ET.
Otherwise, light on macro data.
Volatility & Technicals
ES 5-day average daily range: 104 points — high volatility persists.
No clear whale bias in overnight volume (light and mixed).
ES continues to grind within short-term uptrend channels.
50-day MA: 5610.75 as potential support.
Trendline resistance: 5836/41
Trendline supports: 5542/47, 5226/31, 5110/05, 4950/60
S&P 500 — ES Futures
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Economic Calendar
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