Thursday Jan 8: S&P Futures Roadmap: Today’s Key Levels and Room Strategy
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Thursday January 8, 2026
📖 AM Briefing - Level 10 Red Day Alert & Critical Market Levels
This is a LEVEL 10 RED DAY - the day before non-farm payroll, the day before the Supreme Court decision on tariffs, the morning after nationwide riots, and the day after making new all-time highs. Unemployment claims hit in 15 minutes. Be extremely careful today. This briefing covers yesterday's core strategy short, the trendline break, fair value gap failures, and the critical levels we're watching for Battle Plan Trade #2.
- This Week's Scripture - 2 Chronicles 7:14: "If my people who are called by my name will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven and will forgive their sin and heal their land." Absolutely love it. We need this wisdom today more than ever.
- EXTREME CAUTION REQUIRED - This Is A Red Level 10 Day: Careful boys, careful. Today is Thursday, January 8th - unemployment claims in 15 minutes, non-farm payroll tomorrow, Supreme Court tariff decision tomorrow, the morning after nationwide riots, and the day after new all-time highs. This is as dangerous as it gets. If there was ever a day to sit on your hands or trade with extreme discipline, this is it.
- Yesterday's Trendline Break & Core Strategy Short: We had that beautiful Battle Plan Trade #3 at 67 (my long entry that eventually got trailed out). But more importantly, we saw the classic trendline failure - tap, tap, tap, tap, tap, tap, tap, then loses it. Once we broke that trendline and failed to fill the fair value gap, then fair value gapped UNDER the opening, that was alert alert time. I posted in the group: "Careful with longs" in bold and caps. Time to sit back guys, things look like they're a changing.
- The Perfect Core Strategy Short Setup: We had a core strategy short right at the strong level with the trendline (horizontal line with diagonal line - often a great place to trade). What made this ideal for shorting in an uptrend? We left a fair value gap, laddered back, and ripped through one or two break levels at minimum. The diagonal line was the opening, and when we bounced the first time and failed to fill that fair value gap, then fair value gapped under the opening - that was the signal.
- Critical Reminder - Just Because A Short Works Doesn't Mean Bears Control: This is huge. Even though that short worked beautifully down to the 69.64 target area, bulls still control. Don't get confused. Bulls are still in control even if we went a little further down. The overnight session showed this clearly - we bounced off the strong level, fair value gapped back over the bull/bear line, and made new all-time highs again. Bulls control baby, bulls control.
- Overnight Action & Current Market Structure: Last night we closed around the area, dipped under the bull/bear line (which I said could offer a snappy ladder back long - that didn't happen), continued down to the next strong level and balanced beautifully there with some wicked candles. Then we got that strong bounce off the strong level, re-tapped the top of that strong range, and ripped north. Now we're fair value gapping back over the bull/bear line - still demonstrating bulls are in control.
- Battle Plan Trade #2 - My Ideal Scenario For Today: We still have not done Battle Plan #2. I would love to see us come back down into that area (notice it's green - my preferred trade), dig down to hit the levels in the battle plan, get back above the strong range, and go. Unfortunately, it's already had a really big reaction, so if we come back down, I'd want us to go to the deeper part of this move and then have very strong fair value gapping candles and ladder backs up above the strong range. That's what I'm looking for.
- Warning Shot Levels - Pay Attention: What was originally a "warning shot to bears" has now become a warning shot to bulls after we regained control and made new all-time highs. When we came back into it, I'd rename this the warning shot to bulls (I don't rename levels mid-week, but mentally that's the shift). We're battling back and forth around the bull/bear line, and that's the key battleground.
- For Those Holding Lotto Short Runners: If you're short from the front side of 7,005 and took your TP at the opening (the most beautiful place against that trendline), and you're still holding your lotto runner in a retirement or cash account - listen up. That short made it about 70 points down. As I said in last night's battle plan, you never know, that could be your hundred pointer. I would probably move my stop above these two strong levels and give this thing an opportunity to lose this level. If we lose this area, it could be a really strong move south and that short could definitely be a 100 pointer rather easily.
- Get Tomorrow's Trades Tonight: Visit microtrader.com and click battle plan to access tonight's battle plan. I'll see my traders live 15 minutes before the market opens on Zoom. Be safe out there today - this is not a day to be a hero. Trade small, trade smart, or don't trade at all.
Opening Remarks
Micros Trader begins by emphasizing the gravity of today’s market conditions, noting that January 8 presents an extremely high-risk session due to a convergence of macroeconomic, political, technical, and social factors. The day precedes the Non-Farm Payroll (NFP) report, includes a pending Supreme Court ruling on tariffs, follows new all-time highs in the market, and comes in the wake of nationwide riots. All these elements introduce heightened uncertainty and volatility.
As a result, Micros Trader classifies the day as a “Red Level 10 Day,” their highest risk alert designation. This classification calls for maximum discipline, patience, and a cautious, professional approach to risk management.
Market Environment: Converging Risk Factors
- Imminent Economic Data: The NFP release looms, a notoriously high-volatility event.
- Legal/Political Risk: A Supreme Court decision on tariffs adds binary event risk.
- Recent Price Behavior: A breakout to new all-time highs hints at bullish strength but also introduces the risk of exhaustion or mean-reversion.
- Social Climate: Riots overnight could destabilize sentiment or inject new volatility.
Understanding these drivers is critical before assessing any technical strategy or execution plan.
Recent Price Action & Trend Assessment
The broader trend remains bullish, but yesterday's session introduced signs of short-term vulnerability.
Key developments included:
- Break of Structure: An ascending multi-tap trendline was breached—a technical signal suggesting weakening buyer control.
- Fair Value Gap Below the Open: This was a strong bearish confirmation, highlighting aggressive selling pressure that left inefficiencies in the market and flipped control intraday to sellers.
- Intraday Advisory: A live warning was issued to traders: “Careful with longs... Things look like they’re a changing,” urging caution.
- Overnight Reversal: The selling continued until a key support zone was tested, triggering a strong bounce.
While a tactical short opportunity was successful, Micros Trader warns against misinterpreting this as a change in the overall trend. “Just because a short works doesn’t mean bears control.” The larger uptrend remains intact; this is viewed as a healthy corrective move rather than a reversal.
Key Technical Levels for January 8
- Bull/Bear Line: Price is currently interacting with this key level. A Fair Value Gap forming above it would suggest continued bullish control.
- Primary Strong Support Range: The ideal entry zone for a high-probability long (referred to as “Battle Plan Two”).
- Secondary Strong Levels: Areas of interest for support/resistance and stop placement. One of these held during the overnight bounce.
- Overnight High: The most immediate resistance target for long setups.
These zones form the battleground for the session. Planning around these levels increases the probability of executing with clarity and discipline.
Trading Scenarios & Execution Plans
Scenario A – Preferred Long: Battle Plan Two
- Trigger: Price pulls deeper into the strong support range.
- Confirmation: Strong buyer reaction through “fair value gapping candles” and ladder backs reclaiming range highs.
- Why It Works: Aligns with the broader bullish trend and targets the zone most likely to produce an aggressive reaction.
Scenario B – Alternate Long
- Trigger: A rapid, aggressive reclaim of a key level without a pullback.
- Warning: Risk/reward is poor due to proximity to the overnight high. Must be approached with caution.
Scenario C – Short ‘Lotto Runner’ Management
- Status: Short trade from yesterday has yielded a ~70-point move.
- Adjustment: Move stop just above the two nearby strong levels.
- Goal: Let the position run to 100+ points if the market breaks support.
Final Strategy & Risk Mandate
- Bias: Cautiously bullish. Despite volatility, bulls still dominate the macro structure.
- Primary Focus: Wait for the conditions of “Battle Plan Two” to materialize. Avoid lesser setups.
- Risk Protocol: Strict adherence to plan. This is a "Level 10" risk day—impulsive trading is not acceptable.
Discipline, patience, and alignment with high-probability setups are non-negotiable in today’s environment. The market may offer large moves, but only those who follow process will be in position to capitalize.
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