Weekly Trading Outlook: Key Levels & Market Structure

🎯 Trading Playbook: Market Outlook & Key Setups (02/10/2025)

Introduction

Last week, both MES and MNQ opened the February session near the middle of the monthly pivot range, defined by R4 (upper bound) and S4 (lower bound). These levels represent the expected extremes of the monthly price range, roughly $6,250 (R4) and $5,900 (S4).

On the first trading day of the month, MES held S3 ($5,970), a key buying level. Over the following days, MES oscillated between R1 ($6,100) and S1 ($6,050), indicating price discovery and market balance. This suggests that buyers and sellers have agreed on a fair value for MES.

Given this setup, I see a higher probability of success in long positions rather than shorts. Sellers appear weak in the current market, making it difficult for them to defend resistance levels. Additionally, markets inherently favor the upside.

That being said, I won’t completely rule out short opportunities—if price action justifies it, I’ll take the trade.

In trading, as in battle, preparation and self-awareness are the keys to success. This concept is best captured by Sun Tzu’s wisdom:

"If you know the enemy and know yourself, you need not fear the result of a hundred battles." — Sun Tzu, The Art of War

Daily Chart for MES 2 month view.

Key Levels & Setups to Watch

This week, I will maintain a cash position more often due to the significant economic news events ahead. However, I see this as a positive—news-driven events create higher volume and volatility, which is ideal for intraday traders. It doesn’t matter what the news says—what matters is that it drives liquidity into the market.

"Opportunities multiply as they are seized." — Sun Tzu, The Art of War

This aligns with my approach. By reacting to market structure and volume, rather than forcing trades, I maximize my edge.

Support Levels (Long Setups)

• Monthly S3 ($5,950) → Key level to hold. If it shows strength, I will not hesitate to go long.

• Monthly S4 ($5,850) → If S3 fails, I’ll monitor S4 for a potential reversal setup.

Resistance Levels (Short Setups)

• Monthly R3 ($6,150) → Heavy resistance due to alignment with All-Time Highs (ATH). However, I assign a lower probability to this short trade because sellers are currently weak.

• Monthly R4 ($6,250) → Potential short opportunities here, as R4 represents the upper bound of the pivot range.

• Breakout Scenario → If price breaks above R4, we enter a breakout zone, making a larger move higher very likely. Given the three-month consolidation, new highs could lead to sustained momentum.

I know I’m outlining multiple "if-then" scenarios, but this is how we must think about the markets. We can’t be locked into a single bias—we need contingency plans. Nothing is certain, and all we can do is make high-probability decisions, manage risk, and trust our trading system.

While this analysis focuses on MES/ES, the same concepts apply to MNQ.

With major economic events on the horizon, market sentiment will likely dictate price action. After these events unfold, I’ll provide a full market recap, covering any wins, losses, and lessons learned.

Daily chart for MES 2 month view.

Upcoming Economic Events (High Impact)

Market participants are likely to remain cautious ahead of these major news catalysts, leading to sideways price action—which aligns with last week’s market behavior.

In trading, patience is a weapon. Reacting impulsively to news often leads to losses, while those who wait for the right moment gain an edge.

"Ponder and deliberate before you make a move." — Sun Tzu, The Art of War

Key News Events This Week

February 11

• Fed Chair Powell Testimony @ 10 AM (High Impact)

February 12

• OPEC Monthly Report @ 7 AM (Medium Impact)

• Core Inflation Rate MoM @ 8:30 AM (High Impact)

• Inflation Rate MoM @ 8:30 AM (High Impact)

• Inflation Rate YoY @ 8:30 AM (High Impact)

• CPI @ 8:30 AM (High Impact)

• Core Inflation Rate @ 8:30 AM (High Impact)

Given this lineup, traders are likely to remain on the sidelines until these events shake out weaker hands.

Market Overview

ES (S&P 500 E-Mini Futures)

Markets are designed to mislead the majority before making a decisive move. This is why traders must remain adaptable, especially in range-bound conditions. As Sun Tzu wisely noted:

"Appear weak when you are strong, and strong when you are weak." — Sun Tzu, The Art of War

Since November, the market has been trading sideways. As Camarilla Pivot Range traders, this environment presents great opportunities—while trend traders struggle. This is because range traders capitalize on previous daily levels, whereas trending markets create fewer reference points for entries.

Volume Price Analysis (VPA) Insights

• 12/18/2024: Large buy orders hit S4 ($5,950).

• 01/13/2025: Significant volume absorbed near S3 ($5,850).

• 01/27/2025: Even higher volume entered, leading to an 11-day price compression.

Market Structure Outlook

• Bullish bias remains intact—buyers are consistently stepping in at key support levels.

• Volume confirms accumulation—buyers are absorbing supply rather than getting rejected.

• Three months of consolidation signals that a breakout to new highs is increasingly likely.

Daily chart for MES, 4 month view.

Final Thoughts

Based on market structure, volume analysis, and price action, I believe MES has a strong chance of making new highs. However, with major economic catalysts ahead, I’ll remain patient and adjust my trades based on market reaction.

"Victory is reserved for those who are willing to pay its price." — Sun Tzu, The Art of War

📌 Next Steps This Week:

• Market reaction to key events

• Trade reviews (wins/losses & lessons learned)

• Refining strategies for the following week

📢 Stay disciplined, manage risk, and capitalize on the best setups.