May 15 – Letting the Tape Talk – ESDaily Gameplan

Small win, big message. Structure keeps us grounded.

Thursday May 15, 2025

Wednesday, May 14 was one of those sessions where your trading skills and experience was tested.

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For a trend pullback we typically see 3 things:

- Divergence after stretched run
- Failed attempt at new high - Usually a couple tests
- Break in key demand where RSI is sub 40

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We came into the session staring down a stretched tape — coming off a wildly impressive bull run starting April 22 and running right into 5929 supply. Tuesday, May 13, we topped at 5927.

Divergence was creeping in as I noted this in the newsletter and on X in the afternoon of May 13:

The chart was vertical.
The crowd and newswires were euphoric.

But we had divergence on multiple time frames: The 1 Hr and 15 min chart

I lost count the number of things I saw on Twitter and Substack referencing;
“to the moon.”

….And that’s when discipline matters most.

To take a quote from Tuesday’s letter “Riding The Campaign Into the Wall”:

We’ve longed this market many times in the past month, and we’ve caught several hundred points of this rally.

Now everyone else is waking up.

That makes me pause.
But sentiment’s getting noisy.
Chasers are active.

That’s usually our cue to hold what’s working and get pickier with new risk.

We failed to print a new high yesterday — not even intraday. 5927 never broke, and by the final hours of the session, signs of a liquidation event began creeping in.

Check - ✅ - Divergence was the first warning

After topping at 5927 we hovered in that area all morning Wednesday in a very tight trading range relative to previous trading sessions. At 8 and 9AM we tried our best to form a new high but bulls were gassed.

We failed to print a new high yesterday — not even intraday. 5927 never broke, and by the final hours of the session, signs of a liquidation event began creeping in.

Check - ✅ - A failed attempt at new high

But, in the AM yesterday we of course didn’t know that would be the case. So it didn’t prevent us from looking at the trend, which overall, was still pointing upwards.

Trade Review — May 14, 2025 - 1 Trade

Trade #1 5906.50 Long

Occasionally, new opportunities present themselves after the newsletter is posted. This is exactly what happened yesterday at the 5906 level, a few hours after the newsletter was written and published. 5906 offered a RBR that broke upwards towards the 5927 highs and a retest of that demand was the area I saw as a potential entry point.

On X I noted the following opportunity that formed intraday after the newsletter was posted:

At 9:47 AM, we noted on X that price was pulling in and RSI remained acceptable. The fill came just before 9:50 AM. Confirmation. Reclaim. Long on.

We entered into the position, being filled in multiple orders:

I alerted on X the position and targets:

Why these targets?

Simple, they were the next levels up, and I never get to choose where I put my targets, they are displayed to me on the chart. So, thats what I stuck with.

Upon entering, price hovered around our entry price — getting as high as 5914 for the next 75 minutes.

At 11 AM We flushed to the 5896 reclaim area (which I didn’t add as an opportunity because it was weak) before turning to hit T1. By

At 11:30 I was notified that our T1 was hit, where I did what we always do, take the majority of profits. T1: 5917 (hit — 70% taken).

Bulls gave it a shot at new highs, but like I said earlier in the letter, we never got them. Topped at 5921 before rolling over and stopping us out at 5896 on the remaining 30% of contracts
T2: 5926 (missed — trade rolled)

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I received a DM about this trade and figured I would reference it here since there is so much to offer:

Message From ESDaily Paid Subscriber Harry:

Q: “Hey Man - I took the trade 5906.5 today, with your T1 5917. I really like the process. Just a question, I got stopped out as was strictly following your Stop to Entry > Entry to T1 by at least 1. Note you weren't stopped out. Do you just use some discretion or have I misunderstood how you think about the Stop relative to T1 in the system; just want to check. Just throwing undersized risk at these until I get in the swing of it.”

A: ”Hey Harry! I’ll have a write up about this is the am but great question. Price did wick down and I chose to see how it reacted at the 5896 reclaim spot. It was a weak area but I wanted to ensure we didn’t get wicked. So my initial stop was 91 (close) Upon hitting T1 I moved my stop to 5896 in risk reduction and was stopped. There’s two reasons I “can” do this 1) I’m not at a full size without further liquidity on ES. I prefer the 5850 area. This is a little choppy. 2) I’m long from 5655, 5666, 5814.25 The combination of those allows for room to see that reaction Great question!”

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5896 offered a weak reclaim area (hence why I didn’t include it in the opps section of May 14) but I wanted price to give it a test before being stopped out.

I did that because:
1) I wasn’t at full size
2) I have several longs from much further below.

The combination of those two things allowed me the flexibility to see this out.

Now, price is rolling. Right into the first level I pointed out beneath the 5895 —→ 5870

Will we get the third thing needed to extend a pullback?
❓Break key in several supports while RSI slips under 40 — and the trend isn’t just soft, it’s pulledback.

Let’s see as we dive in to today’s letter:

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Special Note:

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