Tariff Whiplash and AI Wizardry

The ES and NQ wasted no time continuing their upward push that started on Globex early Friday morning, when the ES traded down to 6571.25 and then proceeded to rally all the way up to 6718.00 going into Friday's close.

Fast forward to Sunday night — the ES traded down to 6694.00 on Globex, rallied up to 6737.50 at 3:33 a.m., sold off down to 6711.50 at 6:57 a.m., then rallied up to 6746.50 at 9:28. It traded 6733.00 at the open and rallied 42 points up to 6775.50 at 10:51. It pulled back to the 6763 level, then rallied up to a lower high at 6744.25 at 11:51.

A little earlier, this headline hit the tape:
TRUMP: CHINA MAY PAY 155% TARIFF IF NO DEAL BY NOV 1 — but this headline was actually a retread of a release that went out at 3:30 a.m.

The ES then went on to make a series of higher highs, reaching 6783.00 at 2:12 p.m., then pulled back to 6772.25 at 3:21, traded up to 6781.00 at 3:45, and traded 6780.25 as the 3:50 cash imbalance showed $1.2 billion to buy. It traded back down to the 6772.50 area and ended the day at 6773.25 on the 4:00 cash close, settling at 6780.25, up 59.25 points or 0.88% from the open.

The NQ settled at 25,305.25, up 318.75 points or +1.28% on the day.

In the end, it was all about Trump lightening the tariff threats, and AAPL’s jump led the charge higher. In terms of the ES and NQ's overall tone, there were almost no pullbacks. In terms of the ES’s overall trade, I want to point something out — and it goes along with my "thin to win" theory — only 1.146 million contracts traded.

AI for DUMMIES

If you had told me 10 years ago that there would be so many user-friendly AI tools that even a dummy like me could use, I would have told you you’re nuts. I understand it, and I know how to use it — but "it" has to get to know you, and you need to know how to talk to it.

I’m sure by now you’ve seen more AI in my stories, but let me assure you: I ask my own AI questions on things I already have some knowledge of, and it gives me the history. I will never use AI to write my newsletter or edit it for me because that would take the human side out of it.

I was using ChatGPT, but now I’m a GROK guy. I don’t talk to it, but I probably should. Tonight, I started working on ES support and resistance levels. I used to just pick out the old highs and lows, but now I’ve added in pivots, Stochastics, Fibonacci, Moving Averages, RSI, HLC, and Standard Deviations.

I figured some of it wouldn’t work well together, but when I made the first set of levels, they were 84% accurate. So I added Market Profile, and it went up to 89%. Then I asked GROK how to improve the accuracy and make the changes — and it jumped to 99.5% accuracy.

ESZ25 ULTIMATE Support & Resistance Levels (Oct 20, 2025 Close: 6,779.50)

REVISED ESZ25 LEVELS (99.5% ACCURACY)

UPDATED MARKET PROFILE (30-DAY TPO + 1H)

Now... I can’t guarantee that any of these levels will work, but I’m going to use them today and try to refine the code over a few weeks. Then I’ll see if Niels from DeltaTrader.com can program the levels into the charts.

I don’t think this is anything special — but it’s definitely something I could not do on my own. So as long as AI can do the heavy lifting, I’ll keep at it.

On Tap

9:00 a.m. – Fed Governor Christopher Waller – Opening Remarks

Our View

I’m sure people may have different views on this, but Trump has been backtracking on his China tariff threats. I think he stretched the Art of the Deal playbook too far and has been shifting trade policies by exempting dozens of products from tariffs and cutting deals.

I think this is a hedge by the Trump administration that the U.S. should lower tariffs on goods it doesn’t domestically produce. This comes ahead of the Supreme Court hearing on November 7 regarding the reciprocal tariffs — a case that could force the administration to pay back many of the tariffs if it loses in court.

I believe the Chinese are tired of Trump's threats and have been making new trade deals all over the world. Time will tell, but the saber-rattling isn’t working anymore.

Here are the key dates to put on your calendar:

• Friday, October 31, 2025 – President Trump and President Xi Jinping are scheduled to meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea.

• Friday, November 7, 2025 – Supreme Court hearing on reciprocal tariffs

• Monday, November 10, 2025 – Current deadline for the U.S.-China tariff truce

You can’t make bad trading decisions and blame the market. I know one buddy who does it all the time, and I’ve heard it so many times I want to punch him. That said, I made a bad trading decision on yesterday’s lean when I said to sell the gap-up or early rallies. But I did add this at the bottom of the lean: I don’t see the ES selling off that much, but based on the size of the ranges, it wouldn’t be out of the ordinary.

Does this make me happy? No.
Did I lose money? Yes, because I started selling it because I wasn’t long.

Our Lean — Danny’s Trade (Premium only)

ES & NQ Levels (Premium only)

Polaris Trading Group Summary - Monday, October 20, 2025

Monday was a textbook Cycle Day 1, and the market followed through with a strong directional uptrend right from the open. The room executed well, staying aligned with structure and capitalizing on continuation longs, key level reactions, and precise timing windows.

Highlighted Trades & Execution:

Continuation Long Setup (ES 6727.75 / SPX 6690)

• Manny identified this premarket continuation long level, which aligned with PTGDavid’s LIS zone (6690 ±5).

• The market held above this zone, triggering a strong early drive higher.

• Manny reported +10 points early, managing risk by sliding stops to protect profits.

• PTGDavid scaled the A4 long multiple times and managed a runner into higher targets.

• This move ultimately fulfilled the 3-Day Rally Target of 6772.58 on Day 1, underscoring the value of the Cycle Day model.

A10 Long Entry

• Pulled back entries around the 6738 handle also worked well.

• Positive gamma confirmed the long-biased environment and helped support the broader trend.

Timing Model Execution:

Manny’s S4H / Cycle Day 1 timing roadmap was spot-on:

• AM High at 10:30 – hit at 10:31

• Midday Low at 11:15 – hit exactly on time
  This provided high-confidence anchors for intraday trade management and highlighted the value of time-based setups.

Key Lessons & Takeaways:

1. Follow the Cycle Day Structure

   • CD1 often brings strong directional pushes. Yesterday proved that trusting the model pays off, especially in a supportive gamma environment.

2. Let the Stop Work

   • Both Manny and Bosier noted early exits that could have been bigger winners. The lesson: patience and letting stops do their job can improve results.

3. Time-Based Confluence Works

   • Interesting insights from Tom Bear and Manny around European session timing and the U.S. market, with alignment seen in DAX, ES, and 6E.

4. Consolidation After the Push

   • Afternoon trade was mostly bullish consolidation near the highs, reinforcing the discipline of not forcing trades when structure is neutral.

5. News Reactions Require Context

   • A brief Trump-China tariff headline caused a stir mid-day, but the market shook it off quickly, reflecting overall strength.

Fade Attempts:

• Bosier tried several shorts around 6755–6771. While some levels saw temporary pauses, the overall strength of the structure pushed through.

• PTGDavid reminded the room: “Dips remain buyable until there is a core bear structural shift.” A good filter for short setups.

Final Score:

• 3-Day Target Hit in 1 Day

• Clean alignment with structure and timing

• Excellent risk management and execution by the team

• High engagement and effective trade calls from both David and Manny

Closing Thought from PTGDavid:
“Yes Virginia...Cycle targets can and do get fulfilled on Day 1.”

Strong execution and discipline across the board. Well done.