ES & NQ & RTY Morning Analysis 2/26/2025
Morning Everyone.
Nvidia takes center stage with its earnings announcement coming out after the closing bell.
Yesterday's price action could indicate a market bottom. So, let's set the bull and bear case side by side:
Bull:
- Low made on sizeable volume with a moderate buy delta of 21,368.
- Same low happened across all the major indexes
- VIX topped out 21.46, in between the high from earlier February and the other high made in late January.
- Market symmetry has already been fulfilled
Bearish:
- Buy delta wasn't that impressive. Similar buy deltas happened on 2/10 and 2/12 with much higher delta%
- The VIX didn't make a clear reversal on the daily chart
- All the futures charts have yet to recapture the last breakdown area.
- There is a bearish pattern on all the major index 2-hour charts.
My analysis says the market wants to move lower. However, the other indicators say we should have bottomed or at least come close.
What do I do?
I look for VIX levels to get hit at the same time as the ES hits a specific level.
For example, if the ES drops to 5998.50 and the VIX hits 20.28 simultaneously, I'd look to buy the market.
So, for right now, I'm 50/50 on direction.
When does that change?
The ES would need to start closing candles above 6007.25-6018 hourly, then daily. That would finalize the reversal.
I'd also like to see a clearer reversal on the VIX to signal a bottom.
Otherwise, I'd look for candle closes below 5988.50 to signal further downside.
Since there's ambiguity, I'm treating the market with kid gloves, expecting it can still pull the rug out from under me.
So, let's talk about levels.
The ES is currently trading between 5988.50 and 6007.25. It hasn't yet hit 6007.25. That should act as resistance if we get there, assuming we don't float into it.
Above that is 6018, which is another key resistance, for the reasons I mentioned above about the trend change.
While I don't see it happening, above that is 6039.25, then 6053, followed by 6067.50.
If we got to 6067.50, I'd try to short it for a scalp unless the market is on fire.
What happens if we drop?
The early support and inflection point is 5998.50.
Normally, I'd say closing below that and you could short the market expecting a breakdown. But I get a sneaking suspicion the market may throw under in between there and 5969 and then bounce back to screw people over.
So, I wouldn't buy that level for support, unless you're expecting a run higher.
Below that is 5969. After that is 5952.75.
Getting below that opens us up to 5927, then lower at 5914.25, 5902, and then 5891.
As I said above, if we get candle closes below 5998.50, like multiple hourly candles, I'm going to be looking for more downside.
Otherwise, we could trade sideways, waiting on Nvidia's earnings.
The NQ shows an even more pronounced bearish pattern.
Earlier, it ran into the 21321.75 level and fell away.
Now, it's trading between there and 21230.25.
Where does the NQ get bullish?
Candle closes over 21488.50. That's an important level. And if we hit it quickly, should be resistance. However, I can easily see them pushing past it and then coming back down to retest it if bulls are starting to retake control.
Above that, I have 21571.75, then 21678.25, followed by 21743.75, and then 21804.50.
For support, 21230.25 should work for a quick bounce.
Closing candles below that will bring up lower prices.
Those lower prices: 21230.50 and then 21022.
After that we start getting into new territory with 20931.50, 20865.25, and then 20743.75.
20865.25 is my favorite level here as it has some market symmetry to it.
The RTY looks slightly better than the other two, only in the sense that it appears to have made a clearer bottom. But I wouldn't but a ton of stock on that (pun intended).
Early, we're trading just above 2177.1 and below 2194.2.
The RTY turns bullish if it can recapture 2224.3. However, it may only need to get above 2209 to get bulls in charge.
Any of the levels I listed from 2194.2 up to 2224.3 could work for resistance. Above that, you get 2239.3 and then 2256.
For support, the 2177.1 is an inflection point, not tradeable support IMO.
If we get below that spot, we are going to look to get down to 2156.
Below that is 2142.4 and then 2130.6.
2130.6 would complete the market symmetry for this chart FYI.
That's what I've got for today. The charts for the NQ and RTY will be in the notes.
Feel free to drop me any questions below in the comments or DM me.