April 8th Plan. After the volatility of April 7th, we ask: is this a dead cat bounce?
From -4% to +3.5% in the first hour of trading….
Tuesday, April 8, 2025
After a week that traders won’t soon forget, ES futures are finally showing signs of life. The bounce is here — the question now is, does it stick?
Looking at the daily chart, the damage from last week is undeniable. We dropped straight off a cliff, slicing through major support levels like they weren’t even there. From a high of 5837.25 to a low of 4832, this was one of the fastest, most aggressive five-day selloffs we’ve seen since March 2020 — and it’s not even close.
The entire structure cracked.
Buyers stepped aside. Selling accelerated as vol-targeting funds and levered ETFs got forced to puke risk into thin air. Everyone felt it.
Now we’re sitting around 5179 and trying to build some kind of base. But this isn’t a “bounce and forget” market. This is still a daily trend bear market until proven otherwise.
There are a few key things happening on this chart that I’m watching closely:
We’ve bounced mightily, and we ran smack bad into the 3 hour DBD supply at 5287 after a truly historic rally. We’ve retraced nearly 300 handles off the low, but we’re pushing up into a confluence zone — around 5185–5225 — that matters. That’s the underside of the last breakdown, and it lines up with declining moving averages. In other words: it’s where this rally goes to prove itself. Failure here, and sellers likely show up again hard.
This is interesting:
We are at three significant Fib retracement levels (green,red,purple) from critical highs before selling resumed. While we don’t blindly trade Fib levels, ever… some traders will be looking at this retracement(s) from the low as a potential selling point. Above 5202 clears this but we are lined up now.
There’s a giant air pocket between Friday’s close and Monday’s open. That low-volume rip off the bottom is what happens when nobody wants to be short anymore — but it’s not the same as conviction buying. If the market can’t push higher soon, we’re at risk of rolling back down to retest broken levels like 5007, 4951, or even the full low at 4832.
On the upside, you’ve got layered resistance all the way up to 5375–5395, with 5450+ being the “show me” line that separates tactical rebounds from actual reversals.
Momentum-wise, the RSI has flipped back above 60, and that’s a good sign — but it’s still early. This is the first bounce. And in bear markets, the first bounce usually doesn’t stick. The question is whether we consolidate here, flag, and set up a higher low — or whether this is just a dead cat rally in disguise.
We saw a clean reversal off 4832, with buyers stepping in aggressively. But when you zoom in, that candle tells a story: it was vertical, emotional, and driven by fake Tariff news, shorts covering and dealers hedging. That’s very different from institutions putting real money to work. And unless that real money comes in soon, the bounce could run out of steam fast.
Note: It did result in a quick move from our 4875 long, but the added bonus of all these emotions is “why” we got 310 points on our runner. More on that below
Bottom line: we’re off the lows in a big way, but we’re still under pressure. There’s a long way to go to get back to the ES Major Inflection Point
Volatility remains elevated, and the tape is still fragile. Respect risk, know your levels, and let price lead the way. We’ve got plenty of setups brewing — and we’ll keep walking you through them every step of the way.
Let’s get to it in today’s April 8 AM premarket newsletter…
Through the market chaos that has been the last several trading days, it’s important to note: Most of the last few days I’ve done very little trading. Though, between 9:30 and 10:30AM yesterday was very intense, in front of the screen, quick sells, I only bought twice.
We’ve taken 7 trades since April 2nd when the selloff started and we’ve taken 1 loss.
I’d be willing to bet, thats FAR fewer trades than most retail traders.
But we have a goal.
Readers know what I’m about to say:
“Our job is to take Grade A+ setups only. It’s to take profits when they’re due, not swing for fences. It’s to reduce our risk as much as possible, as quickly as possible. Our job is to follow our rules and turn into a robot when trading. That’s it.”
Yesterday included fleet movements, where price was trading 20 ES points every minute. There were what looked to be 50+ candles like this. Some even more. The volatility of April 7 resulted in one of the greatest trades (in terms of ground covered in a short period) I’ve taken in a long time.
Here’s where we stand.
ES Scoreboard:
Trade Recap Section:
Note: This Trade Recap section breaks down a few of the trades we’ve taken over the past several days. You’ll get insight into why I took the trade, how I approached the setup, and what I was looking for before pulling the trigger. These aren’t hindsight reviews — all setups are shared with readers in advance. Years ago, I began documenting every trade I took in a physical journal — printing charts, writing notes, and tracking my thought process before, during, and after each trade. That practice became a cornerstone of my growth. It helped me refine my edge, stay accountable to my rules, and improve faster than anything else I’ve done. Now, I share that process with you — so you can see real trades, real decisions, and real outcomes. The goal: shorten your learning curve by showing what it actually looks like to apply a strategy in live markets. Note: any targets and/or runners mentioned in the trade recap section may have been stopped out or moved. I include all position management of our trades inside future newsletters and on X.com.
April 1st - 3 Trades
Trade #1- Failed breakdown of 5618. Stopped after 10 points
Trade #2 - Level trackback long from 5606. T1-T3 hit. Runner runs
Trade #3 - 2nd attempt at Failed breakdown of 5618. T1-T3 hit. Runner runs
In the AM letter I wrote:
Likely Supports For 4/1 are: 5618
5600 to 5592 offers a great level trackback trade opportunity and as long as we’re above 40 on the 1 hr RSI, I’ll likely bid that level direct if we get there.
Both came into play today.
Here’s what price did April 1, on a 5 min chart:
Let’s remember our rules and profit strategy before we get into these trades, because if you held and waited for the fences, you may have been upset with yourself.
These come from our Core Strategy here:
#3 I do not get to decide where Targets are. It’s just shy of next level resistance
#4 60-75% of contracts are to be taken at T1
#5 10-15% of contracts are to be taken at T2
#6 Always leave a runner if permitted
#7 Limiting number of trades
April 1 Trade #1 - 5618 FBD - Result - Loss of 10 points on a 25% position
While there’s a lot in the chart below, focus on the grey circles and blue lines.
Above you can see price used the 3/31 high of 5617 as bouncing point, bouncing a few points above this area 3 separate times. A failed breakdown consists of ES using a specific price several times as a bouncing point, flushing it 8-12 points and reclaiming the level, ideally in the same direction as the trend. We wait for acceptance a couple minutes typically, before a rally ensues bouncing off a support level.
This is exactly what we were provided with at ~10:02 EST this AM.
Price did manage to rally 4 points or so before giving way and stopped us out. Remember though, we had the runner from 5545 and because we had the demand just below at 5606-5592, we took a partial position on the 1st FBD opp.
The failure led to:
April 1 Trade #2 - 5606 LTB - Result - T1, T2, T3 hit. Runner in place.
Note: Trade 2 and Trade 3 happened very quickly. I do my best to explain these in detail but the happened literally minutes apart from each other. Moving the stops, adjusting the targets, and monitoring the trade to reduce risk and maximize profits are spelled out as clearly as possible
As posted in this AM writeup:
5600 to 5592 offers a great level trackback trade opportunity and as long as we’re above 40 on the 1 hr RSI, I’ll likely bid that level direct if we get there.
After Trade #1 failing and leading us directly into the LTB area I bought, at the market, while price was printing 5603, I was filled at 5606.
I posted on X:
Though, targets were initiated when price was 5603 I stuck to the plan.
In quick order T1-T3 were hit.
Here’s a 15 min chart for ease:
We were diverging on the 15 minute chart into the LBT area and on the hourly we held strong at a 46+ RSI. This allowed me to take a 50% position long, quickly recouping the 10 point loss on a 25% position just minutes prior in Trade 1.
ES had a monster rally from 10AM-12PM EST.
After hitting T1 at 5612, I took T2 just shy of the original target getting us solidly green on the day.
The rally above 5618 offered another shot at the 5618 failed breakdown and I took it:
April 1 Trade #3 - 5618 2nd Attempt FBD - Result - T1, T2, T3 hit with runner in place
Here’s a picture of it:
The area in yellow is our 5606 LTB trade, and the green lines you see on the chart are the targets for our 3rd trade of the day, the second attempt at the 5618 FBD.
As price bounced from our demand zone, we were offered a second chance at 5618 reclaiming. And reclaim it did.
Very quickly we hit T1, and stop was pulled up to 5559 on Trade 2 and the orginal stop on the 5618 2nd attempt was 5604.
I noted on X again:
Literally minutes later our targets were hit and I pulled the stops up even further on both trades saying:
April 2nd - No Trades
April 3rd - 2 Trades
Trade #1- 5010 Reclaim. T1 hit. Remaining stopped at breakeven
Trade #2 - 5479.50 Reclaim. T1-T2 hit. Runner stopped at breakeven
Trade #1 April 3, 5010 Reclaim
I started the day with the following chart:
Noting the following in this AM’s newsletter:
Likely Supports For 4/3 are: 5510 (reclaim), 5500(D), 5498, 5485 (D)
This idea of a reclaim, we’ve spelt out multiple times. As price attempted to find a bottom, the first opportunity that was given to us. Displaying a bottom was accepted, a new high was put in place, and we respected the existing rally at 5510 was the reclaim
Here’s a chart of the trade before the explanation below:
In the chart above we can see a 6:45AM EST low of 5503. We rallied from there back up inside the range the 5536 or so, before selling off premarket, finding a bottom at 5491. 5491 was the same area we got long yesterday after the initial collapse on Trade #1 post market. Interesting to see this area be the same bottom just 10 hours later.
As we accepted, and then recovered, we can see price reclaim the 6AM-7:40AM lows. Momentum shifted short term, and the simple trade was a 5510 reclaim long with T1, just at the 3AM low basically.
Because we hit this zone and entered the trade pre-market, I was inclined to respect overnight levels, especially on such a selloff. Within 1 minute of the regular trading hours 9:30AM EST open T1 was hit from 5510 to 5524.
I wrote:
Upon entering the trade we took a full size position, hitting T1 within minutes, and simultaneously reducing the risk of the trade by dragging my stop to breakeven. This was just one tick above the entry, at 5511.
Price ultimately came within 5 points of our second target at 5540.25 (T2 was 5545) before turning around and stopping us out for a 14 point gain on 75% of the contracts taken.
At 9:50 I wrote:
Trade #2 April 3 - 5479.50 Reclaim long
Here’s what I wrote at 10:39AM:
“The reclaim back into the 85-80 demand offered a long. We are long at the market and filled at 5479.50.”
Though it took longer than Trade #1, we hit T1, taking 70% by 12:04 PM.
I noted:
By 12:33 PM T2 was taken at 5519 (15%), and we ultimately came back and stopped out at 5480 on the remaining 15%.
By 1:30PM EST I was done trading for the day, and started piecing together this afternoon letter to give as much input as possible.
At 1:30PM, I wrote:
April 4th - 2 Trades
Trade#1 - 5230 LTB for T1, stopped at BE
Trade #2 - 5210 breakdown for T1&T2, stopped at BE
In the April 4 newsletter I wrote (after the selling commenced)
Every move is not an opportunity
People are fairly simple creatures when it comes to the following emotions:
Greed
Fear
Desire
Content
Hope
Despair
Anxiety
It is my purpose of ESDaily to eliminate all of those and trade using a system.
Our job isn’t to catch 300 points on the ES in a day like today.
Only take the Grade A+ setup ES offers a few times a day.
We need to take a PIECE of the action, not get all of it…
It is a system.
This preceded my opportunity section which said:
In terms of direct bid/asks
Above 5267/5327 offer a reclaim long. I’m not huge on knife catching, but we can look for price to find our support/demand areas, accept and buy on reclaims above the area.
A new low of 5210 offers a breakdown short. Remember, failed breakdowns make up a huge component of our trading strategy, but one could issue a sell direct on a breakdown from this area to the 5195 support.
Both worked.
April 7th - 2 Trades
Trade#1 - 4976 reclaim for T1, stopped out on remaining contracts
Trade #2 - 4875 LTB, T1 hit, T2 hit, 310 point runner stopped
Trade#1 - 4976 reclaim for T1, stopped out on remaining contracts
Before the market did what it did yesterday on fake Tariff news, ES provided a great setup for a reclaim of the 4976 area.
You can see on the chart below price used 4976 as a bouncing point multiple times from the 6:30AM to 8AM time frame. Around 8:45 we flushed the support right to 4960 area marked on the 5:50AM high candle, turned and reclaimed the area. As we hit 4960 and reclaimed, I’d like to point out that momentum was on our side as we were above 40 on the RSI diverging from the 8:15 low. We had a small demand area, a previous high, a failed breakdown and very quickly, our T1 was hit 20 points above. We were already volatile before yesterday’s 9:30 move, so I decided to take 75% of the profits at T1. Price faded back on us, and ended up taking the loss on the remainder of the contracts. But the low risk opportunity gave us a great start to the day.
Here’s a picture of the trade for reference.
Trade #2 - 4875 LTB, T1 hit, T2 hit, 310 point runner stopped
Let’s start with the chart:
After Trade #1 was in the books I went to our newsletter from April 7th and found this:
Likely Supports For 4/7 are: 4875
This is the area from 2:30AM Monday morning that saw price attempt to fill the gap. It was the first time we saw higher lows, and higher highs. There was likely a second opportunity should we retrace back to that area.
I noted on X:
As we found those new lows, we ran right into this:
Likely Supports For 4/7 are: 4875
At 9:42 I entered into the trade and was filled at 4875.
T1 and T2 were hit within minutes and the rally of the year ensued. Within 45 minutes ES went from -4% territory to +3.5% territory. I took 75% off at the first target and in a risk reduction move, removed 20% off at T2. In anticipation of a violent move back, but not knowing how far, I placed a 100 point trail stop once we were up over 400 points. I was ultimately stopped on T3 100 points off the high.
Besides taking advantage of a level track-back (LTB), taking profits are pre-defined levels, and reducing risk… I’m not sure what else can be offered here.
We were on the right side of a crazy move.
Structure, rules, and luck came all together at once.
While Trade #1 and Trade #2 were done, I sat the rest of the day.
With so much volatility I didn’t want to give anything back. So I stopped trading.
I think there’s huge value in knowing when to walk away from the table. It’s not easy :) trust me. But I guess over the years, you learn going back in for more generally results in giving back some of your stake. I’m sure there were a few other great setups throughout the day. But, I was perfectly fine watching the crazy market swings, knowing I didn’t have that inherent risk to deal with.
Don’t go seeking more action unless it fits the plan.
We need to take a PIECE of the action, not get all of it.
…Remember, we may just be provided 1 great opportunity a day. We don’t need multiple.
If we nail it, cool.
If we miss it, cool.
Our job is to identify opportunities before they happen, and then execute.
So where does the next "piece” come in as opportunity?
Critical Areas-
Below are ES levels I’m watching for Tuesday April 8
Support/Demand- Support is not the same this as demand. Demand is high quality institutional levels we can see on the chart. While we seek demand, we may find opportunities for longs using support/magnet levels. We can find “subprime” areas of opportunity that price may use as bouncing points. We always want to ensure momentum is on our side in this case. In the section below, you’ll see areas of interest. If I consider them Demand, you’ll see a (D) followed by price.
Likely Supports For 4/8 are: 5157-5151(D), 5130, 5124-5115 (D), 5086, 5075, 5064 (D), 5052 (Critical low), 5039, 5026-5006 (D), 4993, 4987, 4975 (Critical low), 4958, 4947, 4935, 4926, 4915, 4911, 4891, 4880, 4871-4866 (D), 4853(D), 4843-4832 (Critical low), 4822, 4799, 4783-4770 (D), 4763 ,4737, 4721, 4703, 4680, 4656
Resistance/Supply- Supply is not the same this as resistance. Supply is high quality institutional levels we can see on the chart. While we seek supply, we may find opportunities for shorts using resistance/magnet levels. We can find “subprime” areas of opportunity that price may use as bouncing points. We always want to ensure momentum is on our side in this case. In the section below, you’ll see areas of interest. If I consider them Supply, you’ll see a (S) followed by price.
Likely Resistances For 4/8 are: 5185, 5201, 5210, 5212, 5249, 5267, 5271, 5288(Critical high), 5300, 5307-5322 (Critical Area), 5342-5350(S), 5360-5367(S), 5375, 5386, 5403-5408 (Critical Area), 5416-5424 (S), 5435, 5447, 5455 (Critical level), 5471, 5478-5484 (S), 5501, 5509, 5516 (Critical area), 5520-5525, 5533, 5538-5543, 5565 (Critical level/Gap)
In terms of direct bid/asks
5157-5151(D) is a level of demand I’m willing to bid direct. The level lines up nicely with the 6:45PM April 7th trend line as well giving us a bit on confluence.
5058-5051 is a critical area that stands out on the chart as a potential failed breakdown long. I’d be waiting for a break down by no more than 5626-5606 area, and perhaps could take a reclaim of the area above 51. Typically we wouldn’t use such a long distance to take a reclaim but increased volatility forces us to adjust. I’ve got triggers setup to alert me.
4875 is our Trade #2 from April 7th. This may offer a bounce if we get here. However, that’s 300 points below. We wouldn’t want to place a limit order and leave. I’ll be watching momentum if we get back down into this area. No need to knife catch if this ends up being a dead cat bounce.
I think shorting in this environment increases the risk needed in ones trading account. The 4 hr trend is down, no doubt. We prefer to trade with the trend. However, smaller time frames have the opposite price movements. And we want to use the trend that reflects our trading time frame. With the violent moves we saw yesterday, slicing through virtually every resistance up to the 3 hr DBD at 5287, I’ll want to keep my risk small, and use those heavy resistances overhead as targets as opposed to shorting opportunities today.
See the momentum rules here:
I noted this at the end of yesterday’s letter and I’ll repeat it here:
These are very much so “historic” times. Expect violent sells to continue, reclaims everywhere, extraordinary squeezes, and whipsaws. There is zero reason to trade unless we have a great opportunity. Small levels are likely to be blown through. Size down, lessen your risk.
It’s times like these it’s very easy to blow accounts.
Don’t forget where we are (chart from April 7 newsletter:
Newswires are still jittery.
Funds are still liquidating.
Hedge fund pros are calling for more selling to come.
Who knows?
All we do is follow our rules, protect our capital, size risk accordingly, take profits when they’re due, and only take Grade A+ setups
Protection of capital > Catching highs and lows
We’ll have to wait and see what price delivers today
As always, stick to the plan.
Trade like a Robot, let’s make it a great Tuesday
-PT