may17th

This week presents a very interesting market outlook, especially concerning the S&P 500 (ES) 0:04, which has just hit our anticipated target of 7519 0:12. This target corresponds to a -0.5 Fibonacci extension 0:22. We were expecting price to reach this level, and now we will dive into the charts to understand the implications.

Indices Analysis

ES (S&P 500 E-mini Futures)

On a weekly timeframe, the ES S&P 500 0:44 has indeed hit the previously anticipated target of 7519 0:54. This is not a random level; it represents a -0.5 Fibonacci extension 1:05. It's worth noting that the ENQ (Nasdaq 100 E-mini Futures) hit this same level last week, around 28444 1:26.

What makes this week particularly significant is the appearance of a rejection candle 2:11 on the ES chart. This is the first time such a candle has appeared after seven weeks of a strong bull market, serving as a clear warning sign 2:22.

ENQ (Nasdaq 100 E-mini Futures)

Similar to ES, ENQ also displays a rejection candle this week 2:31.

YM (Dow Jones E-mini Futures)

YM, too, shows a rejection candle 2:42.

A crucial aspect of this week's market outlook is the Smart Money Technique (SMT) divergence 2:57. The two leading indices, NQ and ES, are both making all-time highs 3:12, while the lagging index, YM, has failed to do so 3:22. This is a very interesting development.

Furthermore, looking at the coot reports for YM over the past three weeks 3:31, we observe a negative delta [3:35](https://www.youtube.com/watch?v=WOR3HlVvXgM&t=215s] with increasing open interest 3:41. This indicates that sellers are continuously entering the market, suggesting a distributing stage 3:58. These are signatures that the market is attempting to top 4:16. We do not predict tops, but rather follow price on a weekly basis, and this is a very important sign to monitor closely 4:31.

What's Next?

ES (S&P 500 E-mini Futures)

Given the weekly rejection candle on ES 4:54 and having hit the 7519 target 5:06, the most obvious liquidity target for a potential cooldown in price will be the May 11th low 5:25. After a strong seven-week bullish run, price needs some "breathing space" 6:16.

On a daily timeframe, we will be closely watching two levels: the May 12th high and the May 14th low 6:38. These levels could act as an inverse gap, allowing price to push down towards the May 11th low 7:04. If price continues to decline, we could anticipate the May 8th low 7:52 and the opening price of May 6th [8:00](https://www.youtube.com/watch?v=WOR3HlVvXgM&t=480s] as subsequent targets. We will take this "brick by brick," observing how price reacts to the May 12th high and May 14th low – whether it uses them as resistance to push lower or as support to push higher 8:17.

ENQ (Nasdaq 100 E-mini Futures)

For ENQ, to allow price some "breathing room," we expect the low of the current week that just ended to be hit 9:10. Unlike ES, ENQ does not have the clear May 12th and May 14th levels for immediate anticipation 9:29. We will give it a day or two for more price print to reveal its hand before making rushed decisions 9:43.

YM (Dow Jones E-mini Futures)

YM is the lagging index among the three, having failed to make an all-time high when the others did 10:25. This indicates it is the weaker one 10:37, a fact clearly visible in the coot report with a negative delta and increasing open interest for the past three weeks 10:53.

For YM, we also need more price print to establish a cleaner price structure for swing trades 11:18. For intraday plays, one might look for structure on a 4-hour or 1-hour timeframe, but this requires very fast decisions and cannot be predicted far in advance 11:51.

Currency Market Insights

DXY (US Dollar Index)

DXY has shown some unusual movement, but there isn't a clear setup or price structure to trade 13:15. On a weekly timeframe, DXY has been consolidating around the 96 level since May 2025, indicating strong accumulation within this range 13:29. For now, there is no clear direction to take.

Euro USD

Euro USD looks tempting, especially on a daily timeframe 14:15. The liquidity zones around the April 6th low and the March 31st low 14:24 appear enticing for lower timeframe plays, where we would want price to hit those levels.

Pound USD

Pound USD remains within a range, displaying "ugly" price action that lacks the simple "break and retest" patterns 15:20 preferred for clearer trading signals. While a lower timeframe might reveal something, on higher timeframes, the price action is not clear. We would watch the April lows 15:52 as potential targets, but current conviction on currency pairs is low due to the lack of clean price structure 16:05.

Gold Analysis

The coot reports for gold are currently neutral 16:47, suggesting a "do nothing" approach. Price is currently below the March 9th low and the March 23rd high 17:10. Last week, we anticipated price to move above the February 13th level to become interesting, but this did not occur 17:29. If forced to place a trade, we would lean towards a sell 22:30, with the next level to watch being 4483 22:40. However, gold is not a priority for trading at this moment 22:47.

Recap of the Week's Market Outlook

To quickly recap the market situation:

• Indices (NQ, ES, YM): For the first time this week, all three indices displayed a rejection candle 18:13. This is very significant.
• SMT Divergence: The SMT on YM (Dow Jones) is playing a significant role 18:27. The coot report for YM shows a negative delta and increasing open interest for the past three weeks 18:42, indicating it is weaker compared to NQ and ES.
• Correlation Crack: When other indices make all-time highs and one fails to do so, it signals a crack in correlation [19:24](https://www.youtube.com/watch?v=WOR3HlVvXgM&t=1164s]. This means we must be very cautious about buying indices at this time 19:26.
• Trading Strategy: For those who are not adept at lower timeframe trading, it is advisable to stay out of the market [19:42](https://www.youtube.com/watch?v=WOR3HlVvXgM&t=1182s] and wait for price to show a clearer hand. Experienced traders might look for opportunities on lower timeframes. This SMT divergence is a very significant crack to watch closely 20:16. Institutions are already bearish on YM 20:27, and other indices may be undergoing distribution or position closing.
• Currency Pairs (Pound, Euro USD, DXY): There is no clear "break and retest" price action on higher timeframes for these pairs 21:13. DXY has been accumulating in a range for a long time 21:49, so it's not eager to trade.
• Gold: The coot report is neutral 22:09. While a sell bias would be favored if forced to trade, it is not a primary focus for now 22:15.

Trade smart and be safe.