Pre-Market Open Analysis 28 May 2025

Market Overview and Sentiment News

• Modest Pullback After Rally: U.S. stock futures slipped slightly as markets digested Tuesday’s 2–2.5% rally, with Dow, S&P, and Nasdaq futures down around 0.1% premarket.
• Tech Volatility in Focus: Nvidia shares dipped 0.2% in premarket trading despite expectations for a 66% revenue jump, with Tesla up 6.9% on robotaxi optimism and Okta down over 10% after cautious guidance.
• Yield Dynamics: Ten‑year Treasury yields eased eight basis points to 4.5%, reducing funding pressure on rate‑sensitive futures.
• Global Equities Mixed: Europe’s STOXX 600 advanced, Asia markets were mixed, reflecting easing trade tensions and geopolitical developments.
• Nasdaq Futures Under Pressure: June NQ futures ticked down 0.19% as traders await Fed minutes and anticipate sector rotation.
• Liquidity Caution: Thin holiday‑week volumes raise the risk of exaggerated moves on low liquidity.

Sentiment Impact: The brief pullback reflects profit‑taking after a strong rally and mixed corporate headlines. Watch Nvidia earnings and FOMC minutes for directional cues, and manage risk around thin liquidity and tech sector swings.

Technical Analysis Insight

Prices taken from 07:00 this morning

• YM (E-mini Dow Jones 30): After a low near 42,232, price has surged above VWAP (~42,084) and is testing the 200 EMA (~42,352). MACD crossed bullish with rising histogram bars, RSI at 61 signals strong momentum, and ATR is spiking—look for long entries on minor pullbacks to VWAP or mid‑BB, with profit targets near recent VWAP+50 level.
• NQ (E-mini NASDAQ 100): Bounced from 21,407 to clear VWAP (~21,354) and mid‑BB. MACD shows a bullish crossover, RSI at 68 indicates heavy upside bias, ATR elevated—consider participating in trend with pullback buys to VWAP or lower BB band.
• RTY (E-mini Russell 2000): Reversed around 2,079, moving back above VWAP (~2,085) and mid‑BB. MACD and RSI (~60) confirm renewed bullish momentum, and ATR is increasing—fade intraday dips into VWAP for continuation plays, with stops below the recent low.
• ES (E-mini S&P 500): Climbed off the 5,918 low to trade above VWAP (~5,930) and approach the upper BB. MACD histogram enlarging, RSI at 68 shows overbought conditions—watch for shallow pullbacks to VWAP or mid‑BB for trend entries, but manage risk as momentum may exhaust near upper bands.

Today’s Technical Take: Broad equity futures have shifted from a downtrend into a strong reversal, driven by bullish MACD crosses, elevated ATR, and RSIs in bullish territory. The strategy is to join the momentum on pullbacks to VWAP or Bollinger mid‑bands, while scaling out near upper‑band and 200 EMA resistance.

Foundational Analysis

• Fed Minutes Loom Large: The FOMC minutes release today will offer clues on rate trajectory and help set the bias for equities.
• AI and Tech Earnings: Nvidia’s Q1 report, along with releases from Salesforce and HP later today, remain the primary catalysts for Nasdaq futures.
• Monetary Policy Context: Softening yields underscore continued rate‑cut pricing, but Fed’s discretion on timing adds uncertainty.
• Trade and Geopolitics: Delayed tariffs and improved U.S.–EU trade sentiment have eased risk premia, though volatility remains on shifts in rhetoric.
• Commodity and FX Flows: Crude inventories via API/EIA and a weaker yen could influence energy names and export‑sensitive sectors.

Overall Bias: Neutral‑to‑bullish for tech and cyclicals, but be prepared to fade overextended moves into key data and earnings releases.

Economic and Trading Events This Week

• May 28 — FOMC Minutes (02:00 PM ET): Expect detailed Fed policy discussion; anticipate knee‑jerk volatility in futures, fade into extremes.
• May 28 — API Crude Stocks (04:30 PM ET): Surprises in crude inventories can drive energy futures and broad indices; plan for 1:1 volume spikes around release.
• May 29 — GDP Q1 2nd Est & Corporate Profits (08:30 AM ET): A GDP rebound to 2.4% could fuel relief rallies, while profit revisions will influence sector rotation.
• May 29 — Jobless Claims & Pending Home Sales (08:30 AM & 10 AM ET): Claims near 227K and housing data will guide risk sentiment; fade overreactions in housing‐linked names.
• May 29 — EIA Crude & Gasoline Stocks (12:00 PM ET): Oil inventory builds or draws often drive RTY and energy sectors; use tighter stops around data windows.
• May 30 — Core PCE, Income & Spending (08:30 AM ET): Core inflation and consumer metrics shape Fed outlook; position size cautiously and expect two‑sided moves.
• May 30 — Chicago PMI & Michigan Sentiment (09:45 AM & 10:00 AM ET): Early sentiment gauges can trigger intraday shifts—use VWAP to fade false breakouts.
• June 02 — ISM Manufacturing PMI (10:00 AM ET): A print below 49 may pressure cyclical futures, while an upside surprise could spark relief rallies.

Trader Takeaway: This week’s Fed minutes, inflation data, and inventory reports create multiple high-impact windows. Reduce size going into each release, plan fade or breakout strategies around VWAP and Bollinger Bands, and adjust for energy sector volatility around API/EIA prints.

Today's Strategy for Scalpers and What to Watch For

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• VWAP Pullback Entries: Fade weak morning moves back toward VWAP in YM and ES, targeting 42,200 and 5,920, respectively.
• Tech Momentum Scalps: Take long NQ on dips above 21,350 and short failures above 21,480, with tight stops.
• Earnings Reaction: Scale into or out of NVDA, CRM, and HP around their reports; expect 1–2% swings.
• FOMC Minutes Window: Be cautious 30 minutes around 2 PM ET; fade spikes into extremes.
• Liquidity Management: Reduce size into late afternoon and avoid legging into wider spreads.

What Could Happen After Market Open

• Initial Gap-Fill: Early gaps from profit-taking may retrace to VWAP levels in the first 15 minutes.
• Fed-Driven Volatility: Minutes release at 2 PM ET could spark rapid two-sided moves; use VWAP and Bollinger Bands for structure.
• Earnings Surges: NVDA’s close-of-day results may extend tech rallies into after-hours by 1–3%.
• Energy Swing Plays: API update at 4:30 PM ET may trigger 1–1.5% moves in RTY and energy sectors.

Summary

Equity futures opened lower on hawkish Fed minutes and higher yields, partially offset by NVIDIA’s strong earnings and a surprise China PMI uptick. Oil inventory draws underpinned energy contracts, while US fiscal risks and mixed global growth kept volatility elevated. Tactically, fade rallies to VWAP, trade the tech and energy catalysts, and manage tight stops into key data. Maintain a cautious-neutral stance, balancing rate-driven sell-offs with targeted event-driven scalps.