Tuesday Jan 20: Preparing ES Emini and MES Micros Traders To Trade In Our S&P Trading Room

MES MICROS TRADING SYSTEM

Tuesday January 20, 2026

The market opened with significant downward momentum following the holiday, breaching the critical 2026 yearly open threshold. Analysts describe the current price action as "laddering down," signaling a sustained bearish environment that requires heightened defensive measures. Strategic focus remains on technical "Strong Levels," while traders are cautioned that any long positions are strictly counter-trend and should be liquidated quickly. Risk management protocols, including strict adherence to limit-down rules and psychological restraint, are paramount to navigating this period of extreme volatility.
☀️ AM BRIEFING

Microstrader AM Briefing Analysis: Market Levels and Strategic Execution

Executive Summary

The following briefing synthesizes market insights and tactical guidance from the Microstrader morning session. The current market environment is characterized by significant downward pressure following a long holiday, marked by a substantial "gap down" and a "laddering down" price action. Key technical indicators suggest a bearish shift, as price remains below the 2026 open—a level described as a "yearly bull-bear line"—as well as the declining Volume Weighted Average Price (VWAP) and the expected weekly range. Tactical execution focuses on "Strong Levels" and structured "Battle Plans," with a current emphasis on defensive trading.

Market Context and Macro Factors

  • Holiday Impact: Market responding to the first trading day post-holiday with a significant gap down.
  • Regulatory Developments: Potential impacts from tariffs or Supreme Court emergency orders.
  • Corporate Earnings: Upcoming Netflix report expected to influence market volatility.
  • Weekly Guidance: "Battle Plan" and "Strong Levels" updated via PineScript every Sunday.

Technical Analysis and Key Levels

Level Type Description/Status Strategic Significance
2026 Open Price below for NQ and ES. Yearly bull-bear line; below favors shorts.
VWAP Declining. Indicates sustained selling pressure.
Strong Levels Indicators updated weekly. Prices "tap" or bounce even in gap-down scenarios.

Tactical Execution: Battle Plan Review

The "Battle Plan" methodology utilizes specific scenarios to dictate entries for long and short positions. Recent plans analyzed include Battle Plan #2 (failed follow-through), Battle Plan #3 (no entry met), and Battle Plan #4 (successful "tap" and move between strong levels).

Trading Directives and Risk Management

Traders are advised to adopt a "see money, take money" approach for counter-trend longs. Behavioral discipline is emphasized: keeping platforms closed during "vomiting" markets and maintaining the "grace to pause" between impulse and action to avoid forced trades.

Market Strategy Q&A

Q: What is the significance of the 2026 Open level?
A: The 2026 Open serves as a "yearly bull-bear line." Trading below this level for indices like NQ and ES indicates a bearish bias, while trading above favors longs.
Q: How should traders manage long positions in the current gap-down environment?
A: Longs are considered counter-trend. Traders should use smaller position sizes and a "see money, take money" strategy rather than targeting large moves.
Q: What psychological discipline is recommended for volatile sessions?
A: Traders are encouraged to exercise the "grace to pause" between an impulse and action, and to close trading platforms if market conditions are excessively bearish.
📚 RESOURCES FOR FUTURES TRADERS

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