ES Futures & Macro Trends: Key Levels and Market ScenariosCME_MINI:ES1!
Macro and Geopolitics:
There was continued news flow over the weekend after derailed talks between Trump and Zelensky. Europe, UK and Saudi Arabia are still pushing for a Russia-US-Ukraine peace deal that will likely include rare earth minerals.
We also heard Trump commenting on an executive order on digital assets strategic reserves helping reverse losses in CME BTC futures. Investors see this as a positive development prior to the upcoming Crypto Summit in Washington on March 7th.
US March 4th tariff deadlines loom for Canada, Mexico, and China. Trump repeated America's first stance commenting that border security and stopping illegal drug trades should be America’s prime focus.
Economic Calendar:
Looking ahead this week, key economic events include manufacturing PMI data on Monday, employment and services data midweek, and major central bank decisions and labor market reports toward the end of the week. Here’s a breakdown of important releases:
Monday:
Manufacturing PMI data release
Wednesday:
ADP Nonfarm Employment Change
Services PMI
Crude Oil Inventories
Thursday:
European Central Bank (ECB): Interest rate decision & monetary policy statement
U.S. Data:
Weekly Initial Jobless Claims
Continuing Jobless Claims
U.S. Trade Balance
January 2025 Imports & Exports data
Friday:
U.S. Employment Data:
Nonfarm Payrolls (NFP) report
Average Hourly Earnings
Unemployment Rate
Federal Reserve Speakers:
Bowman & Powell scheduled to speak
ES Big Picture:
Despite increased volatility and risks mounting, looking at the daily chart shows that ES futures are still within range and trading above Nov 4th, 2024 and January 13th, 2025 low, however, 2025 mcVAH and R1 confluence has been acting as strong resistance and keeping the markets from reaching new all-time highs.
Despite the risks, our analysis suggests that with the U.S. economy showing resilience, a "buy the dip" approach remains favorable. However, staying selective and strategic with opportunities is key to balancing risk and reward.
Key Levels:
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.
2025 VAH: 6,150
2025 VPOC: 6,133.75
LVN: 6,113.25
Neutral Zone: 6,000 - 6,015
2025 VAL: 5,972.50
LIS/Yearly Open: 5,949.50
Neutral Zone: 5,916.50 - 5,927.25
Feb 2025 Low: 5,848
Jan 2025 Low: 5,809
Scenario 1: Range bound week
Market remains volatile, however, within the neutral zone below key LIS/yearly open and neutral zone above Key LIS/yearly open.
Scenario 2: Weak data points slowing economy
Worsening economic data points along with progress in Ukraine- US minerals deal points towards further buying. Weaker data points may provide room for further rate cuts should economic weakening further materialize.
Scenario 3: Mounting risks and weaker economic data
On the contrary, mounting risk and weaker economic data may point towards stagflation as inflation remains sticky while the economy weakens. This provides room for further decline in ES futures.
