ES Futures Trade Idea - Trump Inauguration MLK weekMacroeconomic News:
US markets were closed yesterday for Martin Luther King Jr. Day. ES, NQ and YM futures saw mild gains yesterday, RTY futures outperformed.
As the 47th president of the United States, Donald Trump took the oath of office promising to protect the border, address inflation, and restructure trade policies. In addition to withdrawing from the Paris Climate Treaty and signing orders to cancel 78 Biden-era acts, he also started energy production reforms, such as drilling for oil in the Arctic. Trump discussed agreements over TikTok ownership, threatened global tariffs, and suggested imposing duties on the EU, Canada, and Mexico. He urged a speedy conclusion to the conflict in Ukraine and gave top priority to evaluating China's adherence to trade agreements. Trump stopped importing oil from Venezuela, emphasized energy independence, and lifted sanctions on Israeli settlers. The goal of bold measures is to put American workers and security first.
Following yesterday's strong selling pressure, which was brought on by the announcement that President Trump would not impose tariffs on the first day of his presidency, the dollar is now showing signs of recovery. Nevertheless, Trump's statement that he is considering 25% tariffs on Canada and Mexico and believes they would be implemented on February 1st shattered trade confidence overnight.
In our opinion, buy the rumor-sell the fact, sell the rumor-buy the fact, will likely be a key theme during Trump’s presidential term.
ES Futures update:
As we can see in the chart above, ES futures are currently above our Line in the Sand, Yearly Open at 5,949.25.
ES futures also made a higher low on Jan 13th, 2025 compared to Nov 4th, 2024 swing low.
ES futures formed a bull flag after the Dec 18th, 2024 FOMC announcement. Price has now broken out of the bull flag channel.
Key Levels to Watch
Key levels represent areas of interest and zones of active market participation. The more significant a key level, the closer we monitor it for potential reactions and trade setups in alignment with our trading plan.
Jan 6th Weekly Hi: 6,068.25
Jan 13th Weekly Hi: 6,051.50
Yearly Open | LIS (Line in Sand): 5,949.25
Resistance R1: 6,105 - 6,115
Resistance R2: 6,145 - 6,155
All time highs: 6,184.50
Scenario 1: Breakout continuation
Price has broken out of bull flag formation from the Dec 18th, 2024 FOMC announcement. Break above current area of consolidation marked in Blue zone forming the area between Jan 6th and Jan 13th Weekly Highs. Price heads towards R1, R2 and R3 targets.
Scenario 2: Further consolidation
Price further consolidates this week awaiting a catalyst to trend higher next week. Strong earnings season propels US futures and stocks higher.
We encourage you to monitor these levels closely and incorporate them into your trade planning. Share your thoughts or insights on these key levels in the comments below.