5850 Failed and Reclaimed. What Now – May 27 ESDaily Gameplan

Tuesday, May 27, 2025

***Housekeeping Notes***
Hope everyone had a great Memorial Day long weekend. The family and I are still on vacation, but we’re headed back later today. So if I can’t be reached like normally, that’s why. I received (literally) hundreds of DM’s in the past 3 days. I promise I’ll get to you if I haven’t yet.

OK.

On Friday I Wrote This About 5850

Today’s plan. Simple:
Rush nothing. Hold runners. 5850 either makes or breaks.

And then I wrote this about the 1st Long Opportunity I was looking at:

1st Opportunity - LTB short (needs to form) - A failure of this 5850-5845 D after an overnight weak bounce if going to bring rapid selling. If our long runner is stopped out and price shows momentum weakness, it’s unlikely we knife below 5828. Instead, bulls will check price, receive a pop back into 45. This would be a shorting opportunity for bears. If demand is broken here, sellers pickup, we catch a weak bid, and we weakly bounce back into 5845-5850, that is a potential short for traders. RSI will tell us if momentum OK’s this

May13th is the level I was looking at:

You can see on the hourly chart we came into the level Wednesday, Thursday, and again Friday early. Just hovering right at the May 13th rally-base-rally.

Momentum had no legs, could barely pop above even 40 on Thursday’s bounce.

This type of hovering at a key demand/supply area is typically indicative of a continuation pattern from the previous move.

What was the previous move?

Down.

If we zoom into a 5 min chart, we can see price action a bit clearer

So we have:

1. Selloff into 1 hr demand

2. Below 40 on RSI (unlikely to bounce and create new highs without pullback)

3. Basing in/at just above the level

4. Lower high lower low on smaller time frame

5. Flush that held 28

6. Weak bounce

7. Small risk area

Say what you want about fundamentals, I truly do not even know what the news was. Don’t really care. All the technicals were right in front of us to know 5850 could fail and could fail hard.

So when I wrote that opportunity, I did that before knowing we were going to breakdown. I knew 5850 was important, but I hadn’t a clue as to which way.

But… I do know that price usually comes back to the breakout/down point and gives another stab at the level.

That opportunity got us into:

Trade Review May 23 - Trade #1

Entry: 5842.25
T1: 5787
T2: 5780
T3: 5773

All hit quickly, and while I was driving. This trade was 25 minutes long.

Trade Review May 23 - Trade #2

Entry: 5767
T1 5785
T2 5804
T3 5819
T4 5832

I was stopped out of our 5655, 5666, and 5814.25 longs. That long campaign began Thursday May 8, and we had a heck of a run. We give thanks for both these two trades, and for the runners that kept us in the massive rally.

The long lasted nearly all day. As I was packing I received alerts that price was climbing.

I did receive several questions on having multiple targets that I want to address here:

T1 and T2 are always without fail 100% of the time at the next level. A few points before. This ensures most of our trades are profitable. I have no idea which way price is going to go, but when we stack odds we can get a high accuracy rate on price turning movements. Our job is to catch pieces of action, no the entire fleet move. Though Friday’s movement turned out to be the entire fleet move, that’s welcomed, not expected. Take the majority of contracts at the next level.

T3 is typically at a higher time frame area I consider a critical area/reclaim area or opposite side supply demand. So for instances on the short, the first major area I saw stacked supports was the 5768 area. I scaled out of that position and took my entire T3 before then, at 5773. Here’s why:

ESM 4 hour chart. We were collapsing right into the gap rally, base, rally. Yes below 40 on RSI but still a hug LTB opportunity. There was a lot of time between 8and 9:15 one could’ve gotten long as we formed a bottom. Inside a HTF zone.

T4 is usually a CT/CB and typically not the same day, not ever almost. It’s usually done after we have a fleet movement in our direction and we come to the top or bottom of the curve and we’re having divergence opposite of price. On the long, we retraced the entire move back to 5840 by 1PM. I wasn’t going to sit through the long weekend with price hitting the selloff point. I took full position and left for the day.

The most important things are T1 and T2. The keep us green. It’s great to have days like May 22 and May 23rd where things scale quickly, but we need to remember…

The results are the results because of profit taking.

Profit taking is the predecessor to risk reduction.

We hit T1. We have a winner.

Let’s get into it.