We’re now transitioning from the NASDAQ June 2025 contract to the September 2025 contract. Moving forward, any discussion on NQ, ES, or DAX will refer to their respective September 2025 contracts.
Current Market Conditions
The market is in a “troubled” state, meaning it lacks clear directional momentum. Instead, we’re seeing price action oscillating within previous candle ranges, creating a chaotic consolidation phase.
- Key Levels to Watch:
- February 21, 2025 (Down Close Candle)
- February 24, 2025 (Fibonacci Expansion Level)
- June 3, 2025 (Fair Value Gap)
Defining a “Troubled Market”
A troubled market is characterized by:
- Unwillingness to trend decisively (up or down).
- Overlapping price ranges (revisiting previous candle wicks).
- Time distortion (market held in a holding pattern before a big move).
Right now, the market is testing key levels but struggling to break through, indicating high uncertainty due to geopolitical risks and macroeconomic factors.
Key Trading Strategies for Troubled Markets
1. Stop Relying on Classic Support & Resistance
In choppy markets, traditional S/R levels often fail. Instead:
- Focus on order blocks, fair value gaps (FVGs), and liquidity pools.
- Watch for consequent encroachment levels (key price reactions).
2. Trade Smart Around Liquidity Pools
- Buy-side liquidity (areas where stops are likely clustered below).
- Sell-side liquidity (areas where stops are likely clustered above).
Example:
- If price fails to hold above a key Fibonacci consequent encroachment level, it may signal a short opportunity targeting lower liquidity zones.
3. Manage Risk Carefully
- Avoid overleveraging—volatility is high.
- Use tight stop losses (but with enough room to avoid noise).
- Focus on high-probability setups (e.g., reactions at algorithmic levels).
Current NASDAQ Price Action Breakdown
Daily Chart Analysis
- February 24, 2025 (Key Candle):
- Price rallied into its upside target but failed to hold.
- Now, it’s retesting the midpoint and lower quadrant of that range.
- June 3, 2025 FVG:
- Price opened at the low of this gap and rallied, showing institutional interest.
Short-Term Outlook
- If price holds below the midpoint of the February 24 range, we could see a drop toward lower liquidity zones.
- A break above could signal a continuation toward higher inefficiencies.
Conclusion
Avoid emotional trading—stick to the plan.
Markets are in a high-risk phase—trade small and nimble.
Focus on institutional levels (order blocks, FVGs, liquidity voids).