Markets Panic Ahead of Payrolls—Will ES and NQ Soar?

Daily Outlook Report – July 3, 2025

For: ES (S&P 500 E-mini) and NQ (Nasdaq E-mini)

1. Market Overview

• Overnight Price Action (Asia & Europe):
  Asian markets were muted ahead of U.S. payroll numbers. Europe saw modest gains, helped by optimism over a preliminary U.S.–Vietnam trade deal. U.S. futures were firmer following record highs in S&P 500 and Nasdaq, though energy names weighed as oil retreated ahead of Friday’s jobs data.

• Relevant Macro/Geo Events:
  

   

  • Ongoing U.S.–Vietnam trade optimism balanced by incoming tariff risks via a looming July 9 deadline.
  • U.S.–Iran tensions persist but have not dramatically shifted equities.
  • President Trump’s $3.3 T tax & spending bill is navigating through Congress, weighing on market risk sentiment.

• Upcoming Economic Events:
  Today’s U.S. Non‑Farm Payrolls (June) midday release is the focal point—consensus ~110K new jobs and slight unemployment rise to 4.3–4.4%. Markets expect this to shape Fed rate cut timing.

• Pre‑market Sentiment:
  VIX at ~16.6–16.8—calm overall but elevated from sub‑14 levels, implying summer ahead.
  Options implied S&P moves of ±33 points for today’s session.
  Futures indicating a slightly positive open ahead of payroll release.

• Technical Context (Daily/4‑H):
  S&P and Nasdaq hovering near all-time highs (ES ~6280 region). Technical structure remains bullish, though rising volatility suggests higher risk of two‑way moves.

2. Technical Levels to Watch

ES (E-mini S&P 500):

• Overnight High / Low: ~6,284 / ~6,270

• Globex Volume Profile: VAH ≈ 6,284 | VAL ≈ 6,270 | POC ≈ 6,277

• Key Zones: Resistance ~6,300 (ATH/psychological); Support ~6,250/6,260 from prior gap

• Gaps / Liquidity: Minor gap (~6,270–6,275) from yesterday’s midday session

NQ (Nasdaq E-mini):
Similar structure; focus on overnight range and round levels near recent highs (~17,150–17,200).

3. Market Sentiment Snapshot

• VIX (~16.6): Indicates low-to-medium volatility; summer complacency but with risk of a spike if payrolls diverge.

• Retail vs. Institutional: Institutions hedging with volatility, retail chasing equity exposure (especially tech/futures).

• Positioning: Elevated put open interest signals some defensive hedging. Retail sentiment remains bullish; institutional tone is selectively defensive.

4. Trade Scenarios & Setups

ES Scenarios

1. Bullish Follow-Through on Beats
   Trigger: Payrolls > 150K, unemployment stable/better
   Key Levels: Break above 6,284–6,300; next target ~6,330
   Stop/Invalidation: Move below VAH (~6,284)
   Rationale: Strong payrolls = risk-on continuation.

1. Volatility-Fueled Pullback
   Trigger: Payrolls < 80K or unemployment up
   Key Levels: Break below VAL (~6,270), target 6,250–6,260
   Stop/Invalidation: Reclaim above POC (~6,277–6,280)
   Rationale: Bad payrolls = VIX spike, profit-taking.

1. Chop-in-Range Fade
   Trigger: Payrolls in line; low VIX, rangebound action
   Trade Plan: Fade extremes (~6,284/6,270), target mean (~6,277)
   Stops: Tight outside overnight high/low
   Rationale: Summer range action, fade the edges.

NQ Scenarios

• Mirror ES logic but with larger amplitude. Use overnight high/low as guide. Tech likely to move more on payrolls miss.

5. Backtesting / Statistical Edge

• Historical Insight: On NFP days with < 80K, ES averages -0.5% to -1% intraday (2020–2025 sample).

• VIX Relation: VIX spikes +20–30% on negative surprises (e.g., 16.5 to 20+ in hours), often creating short-term high-impact setups.

Final Notes

• Mark key levels (overnight high/low, VAH/VAL/POC, round numbers) in your NinjaTrader chart.

• Let price action trigger your trades—don’t chase. NFP moves can be reactive and choppy.

• Remember: Context > Prediction. Prepare for scenarios; react, don’t predict!