1 April 2026 - ES & SPY
Short regime challenged.
Yesterday's Review
War headlines sent the market above two sell zones, in both cases giving a pullback to join the move up.
Current Regime
The buy levels at the 6550 and 6500 areas, indicate a potential for rotational trade between them and the main sell level under 6700, which supports the current long-term short regime.
Levels
Scenarios
Main Scenario — Rotational
Intraday rotational between buy levels and sell level. This is a scenario complemented by shorter term mean reversion trades / scalps at the edges of ranges. Targets are mid-ranges, vwaps, and opposite sides of range.
Alternative Scenario 1 — Bearish
Price is unable to accept above 6700 and the buy levels beneath are compromised, establishing a new leg down. Note, the importance and underlying timeframe of the 6700 level, indicate that a 20 tick (or more), could occur. Acceptance here, needs time.
Alternative Scenario 2 — Bullish
Acceptance above 6700 opens up a potentially very strong mid/long-term move up, which will constitute a new regime.
Important Notes
Execution — Sell and buy levels are not automatic entries. Traders must use their own short-term tools — orderflow, technical indicators, or otherwise — to confirm and time execution. If at the time of reading the market is trading above a sell level, that level's bearish bias is void, and vice versa.
Level Integrity — Levels are invalidated by acceptance beyond them, not a few ticks through. A wick through a level that reverses is rejection, not invalidation.
Timing — This note is prepared pre-market. Intraday developments may alter the relevance of any scenario.
Definitions
Price acceptance — Price spends significant time and generates high volume above or below a level, establishing a market consensus that it is a fair trade location.
Price rejection — Price fails to spend significant time or generate high volume at a level, showing a lack of market consensus that it is a fair trade location.
Rotational market — Price oscillates within the range of an accepted value area regardless of timeframe or extent, effectively rejecting trade outside that range to maintain the established consensus.
Buy/Sell levels — Price ranges where increased participation is expected and risk/reward is maximised, provided the level maintains its integrity.
Bullish/Bearish refs — References expected to provide buy/sell side action, without being important enough to support a regime.
Targets — Price levels representing the partial or full conclusion of a move, where profit-taking may trigger a counter-reaction without being treated as an expected trend reversal location.