Thursday October 30, 2025

In Thursday's AM Briefing, Micros Trader advised caution amid strong bullish trends in equity futures markets, highlighting risks tied to market structure fragility and macroeconomic catalysts. Despite new highs in NQ and ES, divergence from other indices like the Dow and Russell raised concerns of a potential liquidation break. High volatility indicators, including an elevated ATR and major earnings releases, support a strategy of tactical inaction until conditions stabilize. The preferred approach involves waiting for a significant pullback to engage long trades at more favorable price levels.

☀️ AM BRIEFING

Opening Remarks

Micros Trader opened the AM Briefing by emphasizing a philosophy of strategic inaction, particularly during periods of extreme volatility. With the market setting new all-time highs in the NQ and ES, the tone was one of cautious respect for the bullish trend, while simultaneously warning that the structure beneath this trend feels weak—like a "house of cards." The risk of a sharp, sudden liquidation event remains high, driven by a confluence of catalysts including recent FOMC developments and major tech earnings.

The Principle of Strategic Inaction: Knowing When to Wait

Micros Trader stressed that not every trading session warrants participation. Waiting is not a passive activity, but a strategic decision rooted in discipline and risk management. As he put it, “Waiting is part of trading. Not every session is a trading session.”

There are several high-risk catalysts that justify staying on the sidelines:

Monetary Policy Events: FOMC announcements are considered "level 10" risk events. The day after an FOMC announcement is often even more volatile than the event day itself and should be labeled a “special day” on your trading calendar.
Major Earnings Reports: When multiple large-cap tech companies—Meta, Microsoft, Google, Amazon, and Apple—report earnings in a concentrated time frame, the market tends to move sharply and unpredictably.
Geopolitical Events: Meetings between global leaders, such as a Trump-Xi summit, can trigger sudden, erratic price movement. These types of macro events further support the case for strategic inaction.

Micros Trader reminded traders that markets are open 23 hours a day, six days a week. The opportunity to engage is plentiful, and capital preservation should always be a priority. It’s perfectly acceptable to opt out of trading on days where the odds are skewed against you.

Current Market Condition Analysis

The market remains in bullish control, but there are signals of underlying instability. Micros Trader noted that bulls clearly dominate the tape, reiterating, “Bulls control, bulls control, bulls control until proven otherwise.” Every pullback is being bought, and price continues to respect key weekly support levels.

However, there are several structural concerns. While the NQ and ES reached new all-time highs overnight, the Dow and Russell failed to participate. This divergence undermines the broader strength of the rally and leads Micros Trader to describe the current structure as a “house of cards.” He warns of the elevated risk of a liquidation break—a fast, sharp drop triggered by long liquidation—and insists that traders must have hard stops in place to protect capital.

Price is approaching fragile levels. Prepare for a potential liquidation break.

Volatility Indicators

Average True Range (ATR): On the three-minute chart, a high ATR indicates danger. An ATR of 11.8 was recorded during the previous RTH session, signaling “blood on the streets.” Even in the overnight session, an ATR of 9.5 was described as “caution, caution, danger, danger.”
Essentials Indicator: Large red candles on this custom indicator were highlighted as strong visual warnings of selling pressure and potential risk. These signals, coupled with ATR readings, reinforce the cautionary stance.

Retrospective: FOMC Day Trading Case Study

Micros Trader reviewed a recent session during the FOMC announcement as a case study for pre-planned execution under volatile conditions.

A detailed game plan had been created in advance of the release. The expected move was approximately 45–50 points in either direction. The upside target was 6983; the downside was a pre-determined support level.

Once the news hit, the market chose to break down. The plan was to wait for price to breach the RTH low and other major supports, then use those broken levels as support zones for potential long trades on a rebound. This approach yielded three separate scalps, each producing 10+ points—a “hat trick,” as described. The session was not about catching big swings, but rather executing disciplined, short-term trades.

Forward-Looking Trading Plan

Looking ahead, the preferred strategy is defensive and focused on letting the market come to more attractive levels before taking action.

Preferred Scenario: The Vomit Move

Micros Trader said the best-case setup would be a sharp, aggressive sell-off—what he calls a “vomit move.” Such a drop would allow the market to fill the gap to Friday’s close and set the stage for strong turnaround trades next week.

He made it clear that he has no intention of trading into the sell-off itself. Instead, the strategy is to wait for the move lower to complete and then look for “ladder back long” opportunities.

Alternative Scenario: Bullish Continuation

If the market does not pull back and instead pushes to new highs—specifically toward the 6983 level—the plan is to trade it only as it comes back down. Taking fresh longs at all-time highs is considered risky and uncomfortable: “a little scary,” as he put it.

Avoiding the Current Price Area

Micros Trader also labeled the current price zone—around the Value Area Low (VAL)—as “really difficult.” It’s not a good place to initiate shorts, and it doesn’t offer enough risk-reward to justify long entries either. His focus remains on engaging the market “definitely further down.”

Glossary of Key Terms

ATR: Average True Range – a measure of volatility often used to determine risk conditions.
RTH: Regular Trading Hours – the core trading session of the day.
VAL: Value Area Low – the lower boundary of the value area from a volume profile analysis.

❓ FREQUENTLY ASKED QUESTIONS

TRADING SESSION FAQ

Question 1: What early indicator suggests that there is "blood on the streets" and a need for extreme caution in trading?

A: An early indicator is the ATR (Average True Range) on a three-minute chart reaching high levels, such as 11.8, which signals danger and caution to traders.

Question 2: Besides FOMC, which major technology companies are reporting earnings after the close today, according to the briefing?

A: Amazon and Apple are scheduled to report earnings after the close today, in addition to Meta, Microsoft, and Google having reported theirs already.

Question 3: What is the fundamental stance the trader must maintain regarding the market direction until contrary evidence is presented?

A: The trader must maintain the stance that the bulls control the market and continue on that team until it is proven otherwise.