Last week, we discussed how sellers were gradually gaining control of the market. While buyers continued to defend key support levels, each attempt to rally was met with renewed selling pressure. That pattern suggested the market would likely revisit the recent lows—and possibly break below them.
That’s exactly what happened.
The market reached our downside target area before attracting buyers once again. However, while prices have rebounded, the recovery has so far failed to push above the previous swing high. That leaves traders asking an important question:
Is this simply a pause before another move higher, or is the market setting up for another leg lower?
Why the Downside Target Was Important
Markets rarely move in straight lines. Instead, they tend to alternate between periods of strength and weakness as buyers and sellers compete for control.
In last week’s Market Minute, we pointed out that sellers appeared to be “testing” buyers by repeatedly challenging support levels. Each bounce became weaker, suggesting buying pressure was slowly fading.
When support is tested multiple times, it often becomes more vulnerable. Eventually, sellers gain enough momentum to push prices lower, which is exactly what occurred.
Rather than reacting emotionally, traders who recognized this developing pattern had an opportunity to prepare instead of being surprised.
The Rally Is Encouraging… But Not Yet Convincing
After reaching the downside target, buyers stepped back into the market and produced a respectable rally.
So far, however, that rally has failed to exceed the previous swing high.
From a technical standpoint, that’s significant.
A healthy uptrend typically produces a series of higher highs and higher lows. Until buyers can establish a new higher high, the market remains in a position where sellers could regain control.
This doesn’t necessarily mean another decline is inevitable.
It simply means the market has not yet confirmed that the larger uptrend has resumed.
What Professional Traders Are Watching
Rather than predicting the next move, experienced traders focus on confirmation.
This week, several key questions deserve attention:
- Will buyers generate enough momentum to break above the previous swing high?
- Can support continue to hold during any pullbacks?
- Is volume increasing as prices move higher, or is buying interest fading?
- Are market leaders participating, or is strength becoming more selective?
These questions often provide more valuable information than the latest market headlines.
Avoid the Trap of Prediction
One of the biggest mistakes traders make is assuming they know what the market must do next.
Successful traders don’t need to predict every move.
Instead, they develop a plan for multiple scenarios.
If buyers reclaim the previous high, the bullish trend may continue.
If sellers regain control before that happens, another test of support becomes increasingly likely.
By remaining flexible and allowing price action to guide decisions, traders can reduce emotional decision-making and respond to what the market is actually doing.
Final Thoughts
The market successfully reached our downside target, validating the weakness we discussed last week.
Now the focus shifts to whether buyers can regain control by pushing prices above the prior swing high.
Until that happens, patience remains one of the most valuable tools a trader can have.
At FFR Trading, we believe successful trading isn’t about predicting the future—it’s about preparing for multiple outcomes and managing risk with discipline.
If you’d like a closer look at the key support and resistance levels we’re watching, be sure to watch this week’s Market Minute, where we break down the charts and discuss what could happen next.