Key Market Levels for ES & MES Traders: Monday Sep 22

Opening Remarks

Micros Trader opened the September 22nd AM Briefing by highlighting a central challenge for traders: patience. “The most difficult part of trading,” he explained, “is waiting for your setup to form—especially on Mondays.” But just as challenging, he noted, is resisting the urge to act impulsively during that waiting period. “It’s the waiting that’s the hard part, and not doing something stupid while you are waiting.”

This simple truth led into the broader theme of the day: building trading maturity through discipline, process, and character.

Core Trading Philosophy: “Faithful in Very Little”

Micros Trader drew on a devotional message centered around the biblical principle of being “faithful in very little.” He emphasized that traders who demonstrate discipline managing small accounts earn the right to trade larger size. The lesson from the Gospel of Luke was clear: the servant who proved trustworthy with a small amount was given greater responsibility. This same principle applies to trading—consistent faithfulness in the small details of trade management lays the foundation for scaling up.

Micros Trader explained that leverage is not something you “feel” ready for—it’s something your account balance earns. Success is not about “hitting home runs,” but rather about process, discipline, and capital protection. Tracking one’s faithfulness to their trading plan becomes the true metric of success.

Glossary of Key Terms

• Liquidation Break: A sharp downside move caused by weak longs dumping positions, not by strong new selling. Typically fast, leaves poor structure, and ends quickly once weak hands exit.

Analysis of Recent “Battle Plan” Trades

Trade 1: Long Setup
A flush beneath a key level followed by a bounce gave a technically valid long setup. Price moved up 5–6 points, mechanically fulfilling the plan. However, Micros Trader opted not to take it, describing the price action as “horrible and ugly”—untradeable despite working on paper. This underscores the importance of evaluating not just levels but the behavior of price at those levels.

Trade 2: Short Setup – “Speculator Special”
A short opportunity from the same strong level targeted the next key level below. This trade played out as expected. The liquidation break hit the initial target and even overshot it, validating the entry. A 13-point target with a 6-point stop implied a solid 2:1 risk/reward. Traders who managed the runner remained in position through consolidation before the break.

This “Speculator Special” was defined as a higher-risk setup: shorting when bulls are still in control and no clear liquidity grab is in play. But Micros Trader noted it was based on a specific three-part confluence: elevated risk of a liquidation break, weak Friday close, and the potential for a gap down.

Market Assessment and Near-Term Outlook

Technical Posture
– Price is trading in the lower distribution.
– Below VWAP.
– Structure is “lading down.”
– Still inside Friday’s range.

Sentiment
The tone is tentatively bearish. “It isn’t bearish yet, but boy does it feel like it,” said Micros Trader. He used a vivid image to capture the moment: “The bulls are hanging on to a steel bar with sweaty hands.”

Another key observation is the “bouncing ball effect” near resistance: successive bounces are losing energy, suggesting buyers are weakening. This opens the door for another potential liquidation break.

Seasonal Context
A seasonality chart for September was referenced, pointing out that the expected “seasonality drop” hasn’t fully arrived yet. Micros Trader expressed hope for a pullback deep enough to reset the market—possibly even taking out August lows. Such a move, he argued, would set the stage for a strong fourth quarter, with October through December historically leaning bullish.

Community and Admin Notes

– The briefing covers Monday, September 22nd.
– A live stream is scheduled for Tuesday.
– The Battle Plan will be opened to everyone Monday night to prepare for the stream.
– For full access, viewers are encouraged to visit microstrader.com for the Battle Plan and Daily Devotional.

MICROS TRADER – FAQ

Q: Who presented the AM briefing video and when?
A: The AM briefing video was presented by microsrader.com on Monday, September the 22nd.

Q: Where can I get the Battle Plan and when is it released?
A: You can grab the Battle Plan at microtrader.com by clicking “battle plan”. It is released in the late afternoon with the entries for the night and the following day. It was made available to everyone for the night and Tuesday.

Q: When is the next live stream scheduled?
A: A live stream was scheduled for tomorrow (Tuesday) on YouTube.

Q: What is the most important “tip of the day” for trading?
A: The most difficult part of trading is the waiting for your setup to form (especially on Mondays) and ensuring you are not being stupid in between your setups.

Q: What were the key news drivers scheduled for the week following this briefing?
A: There was nothing scheduled for Monday. There was some PMI scheduled for Tuesday, and new home sales scheduled for Wednesday.

Trading Terms and Concepts

Q: What is a “liquidation break”?
A: A liquidation break is a sharp downside move. It is caused by weak longs dumping positions and is not caused by strong new selling. It is typically fast, leaves behind poor structure, and often ends quickly once the weak hands have flushed out.

Q: When is the risk of a liquidation break considered high?
A: The risk of a liquidation break is high depending on how the market finished on Friday and if there is a gap down.

Q: What is the “bouncing ball effect”?
A: This effect describes a level that is attacked repeatedly. The first time the level is hit, there is a big bounce, the next time the bounce is smaller, and the next time it is smaller still. Eventually, this level could generate another liquidation break.

Q: How do you define a change in the character of the market?
A: The character of the market changes when traders can ladder under an RTH (Regular Trading Hours) low and achieve at least one closure, though multiple closures are preferred if the market is expected to continue moving down.

Trade Setups and Strategy

Q: What was Battle Plan Trade Number One?
A: This was a long idea involving a flush under a strong level, followed by a move back above the strong level in a lading sequence. While it worked out (moving up five or six points), the price action was described as “horrible and ugly” and “untradeable”.

Q: What was Battle Plan Trade Number Two?
A: This trade offered a short opportunity using the same strong level as Trade Number One, targeting the next strong level.

Q: What is a “speculator special”?
A: The “speculator special” was the exact same trade as Battle Plan Trade Number Two. It was labeled this way because it involved shorting while the bulls controlled the market, and it did not require a liquidity grab. This trade was supported by a three-part recipe: the high risk of a liquidation break, how the market finished on Friday, and a gap down.

Q: If I capture a large point separation, what should I do?
A: If you capture 20 or 30 points of separation, you should consider shutting down your platform and walking away to avoid the temptation of moving your stop.

Q: How should I manage positions during a liquidation break?
A: The suggestion was to set the initial target (TP) for two out of three contracts at the next strong level, and keep one contract as a runner.

Q: What level was identified as the “warning shot to bulls”?
A: A specific strong level was identified as the warning shot to bulls. If this level is lost, it could lead to a “really interesting down move”.

Trading Discipline and Account Management

Q: When is a trader ready to leverage up or trade a larger size?
A: Traders earn the right to trade larger size by proving discipline in small positions. The simple answer to when you are ready to leverage up is when your account balance tells you you can.

Q: What is the recommended focus for today’s practical application?
A: The recommendation is to focus on process over profits and track your faithfulness to your trading plan.

Q: What constitutes market success?
A: Market success is not about “hitting home runs”. It is about showing up daily with discipline, properly managing risk, and protecting capital. Small consistent wins build the foundation for larger success.