#expected move

The best Monday prep is not predicting one perfect move.

It is building a map before the open:

expected move and volatility budget

prior week highs/lows

overnight context

gap-fill locations

levels where the trade idea is wrong

The tape still has risk-on structure, but it is no longer early. ES, NQ, and RTY are all pressing beyond their quarterly +1SD expected-move maps while crude volatility keeps the macro risk switch active. The job today is not to guess the headline. The job is to read acceptance, rejection, and the quality of the next pullback.

What You Need To Know Right Now

Monday opens with two forces fighting for control of the tape.

The first force is still bullish. Friday's jobs data helped confirm that the labor market cooled without breaking, large-cap technology remains the leadership engine, and the index trend has not meaningfully rejected the record-high zone. That keeps dip buyers interested and gives the market permission to keep defending risk.

The second force is location. ES, NQ, and RTY are not sitting in the middle of a quiet range. They are stretched against the higher-timeframe expected-move map. That does not make the market bearish by itself, but it does raise the quality bar for every long entry. When price is beyond quarterly +1SD, the cleanest continuation setups usually need acceptance, a controlled pullback, or a reclaim after a shakeout.

The PonoTrading expected-move run has VIX at 18.17, VXN at 23.76, GVZ at 26.48, and OVX at 72.15. That is an important mix: equity volatility is moderate enough to keep structure tradable, but crude volatility remains elevated enough to change the tone quickly if energy headlines heat up.

Today's daily 1SD map:

| Product | Daily 1SD Range | Current Planning Read | |---|---:|---| | ES | 7,303.38 - 7,534.62 | Above the Q2 +1SD alert area; acceptance matters more than emotion. | | NQ | 28,700.66 - 29,964.34 | Leadership remains strong, but the quarterly stretch is extreme. | | YM | 48,917 - 50,465 | Still inside a cleaner daily volatility band. | | RTY | 2,822.91 - 2,912.29 | Breadth proxy holding above quarterly +1SD. | | GC | 4,607.08 - 4,833.72 | Balanced inside the daily band unless macro fear returns. | | CL | 89.18 - 101.66 | The macro pressure valve; watch the upper range closely. |

The biggest alert is not one product. It is the cluster: ES quarterly +1SD, NQ quarterly +1SD, and RTY quarterly +1SD have all been reached. That is a market-wide stretch, not an isolated single-chart event.

Prior Session

Friday gave buyers what they needed. The April labor report was strong enough to support growth, but not so hot that the market had to immediately panic about inflation. That combination helped equities press higher and kept the AI/technology leadership story intact.

The more important detail is how the market handled the information. It did not simply bounce from a washed-out low. It pressed into an already extended zone. That changes the trading problem. A bullish headline after a clean pullback is one thing. A bullish headline at the upper side of a higher-timeframe distribution is different.

That is why Monday's read needs to separate trend from entry quality. Trend can remain constructive while chase entries become lower quality. Price can continue higher while the trader's risk/reward gets worse. Those two statements can both be true.

Friday also left crude risk unresolved. Energy volatility stayed elevated, which means equity traders cannot ignore CL even when Nasdaq is leading. If crude stays contained, risk can keep leaning on AI strength and resilient growth. If crude presses back toward the upper side of its daily expected move, inflation sensitivity and headline risk can return fast.

Overnight Markets

The overnight tape is best described as constructive but fragile. U.S. equity futures are hovering near record-high pressure, not breaking down, but also not giving traders a fresh low-risk base. That puts the focus on whether early strength can hold after the cash open.

Crude is the key cross-asset monitor. The CL daily map runs from 89.18 to 101.66, with the midpoint near 95.42. Inside that band, oil is elevated but still behaving inside the expected volatility envelope. Above the upper band, energy risk becomes louder and equity longs need more caution. Below the midpoint with acceptance, oil pressure cools and risk assets may get more breathing room.

Gold is not the lead story unless it starts leaving its own daily band. GC's daily range is 4,607.08 to 4,833.72. A quiet gold tape supports the idea that the market is still treating this as a risk-management problem rather than a full panic impulse.

The clean overnight message: risk appetite is alive, but the market is no longer cheap.

US Futures

ES

ES is operating around the key stretch zone. The daily 1SD map is 7,303.38 - 7,534.62, while the Q2 +1SD boundary sits near 7,399.17. That makes the 7,399 - 7,535 area the main battlefield.

Above that zone with acceptance, buyers can keep control and target continuation. The important word is acceptance. A fast push above the area that immediately fails is not acceptance; it is emotional extension. If ES loses the Q2 +1SD area and cannot reclaim it, the better read shifts toward rotation back inside the daily map.

NQ

NQ remains the leadership product and the most stretched product. The daily 1SD range is 28,700.66 - 29,964.34, while the quarterly map has already triggered the above +1SD alert. Leadership can stay strong here, but the trade needs structure.

If NQ holds above the lower side of the daily band and builds above prior acceptance, the long side can stay in play. If it pushes toward the upper daily band without internals or breadth confirmation, the risk of a failed extension rises.

RTY

RTY matters because it tells us whether risk appetite is broadening or narrowing. The daily 1SD range is 2,822.91 - 2,912.29, and RTY has also reached its Q2 +1SD alert. Holding above 2,822 - 2,829 keeps the breadth story constructive. Losing that area would warn that the rally is becoming more dependent on mega-cap leadership.

CL

Crude remains the macro switch. The daily CL map is 89.18 - 101.66. If CL holds inside the range, equities can keep treating oil as a contained risk. If CL accepts above 101.66, energy becomes a front-page problem again and equity longs need to account for headline-driven de-risking.

Expected Move Map

The expected-move map says today's market is not random noise. It is a set of decision zones.

| Product | Daily Midpoint | Daily 1SD | Daily 2SD | |---|---:|---:|---:| | ES | 7,419.00 | 7,303.38 - 7,534.62 | 7,187.76 - 7,650.24 | | NQ | 29,332.50 | 28,700.66 - 29,964.34 | 28,068.81 - 30,596.19 | | RTY | 2,867.60 | 2,822.91 - 2,912.29 | 2,778.22 - 2,956.98 | | GC | 4,720.40 | 4,607.08 - 4,833.72 | 4,493.76 - 4,947.04 | | CL | 95.42 | 89.18 - 101.66 | 82.94 - 107.90 |

The higher-timeframe map is where the real edge is today. Daily levels help with intraday execution, but quarterly +1SD tells us the broader auction is stretched. That means traders should be careful with any setup that only works if price keeps moving in a straight line.

The best use of these levels:

Inside daily 1SD: be patient and let structure form.

At daily +1SD: require confirmation before chasing continuation.

Back inside after a failed push: target midpoint before assuming collapse.

Above quarterly +1SD: respect the trend, but reduce tolerance for sloppy entries.

Market-Moving Headlines

The headline stack is not one-directional.

The bullish side is still supported by Friday's labor data, AI leadership, and index resilience near record highs. A labor market that cools without breaking gives traders a reason to keep risk bid. Strong technology leadership gives NQ a reason to keep outperforming.

The risk side is oil and inflation sensitivity. Crude volatility remains high, and energy headlines can matter more when equities are already extended. If oil jumps while ES and NQ are above higher-timeframe expected-move bands, the market can rotate quickly because late buyers are sitting in a less forgiving location.

The most important headline for traders is still price itself. If the market holds the stretched zones with clean acceptance, the bullish trend deserves respect. If the market rejects the stretched zones, the same bullish story can become a trap for late longs.

Economic Calendar

The week has several catalysts that can shape the next volatility impulse. Monday's calendar is lighter than Friday's jobs report, but the market is already looking ahead to inflation and consumer data.

| Event | Timing | Market Read | |---|---|---| | NAHB Housing Market Index | Monday | Secondary, but useful for rate-sensitive sentiment. | | CPI | Later this week | The main inflation test for a stretched equity tape. | | PPI | Later this week | Confirms or challenges the inflation read from CPI. | | Retail Sales | Later this week | Tests whether the consumer can support the growth story. | | Fed commentary | Ongoing | Matters most if oil or inflation expectations rise. |

The practical read: Monday can trade technically, but the week has enough macro risk that traders should avoid oversized assumptions from one opening move.

Earnings On Deck

Earnings season is winding down, but the leadership message still matters. The market has been rewarding AI infrastructure, semiconductors, cloud, and large-cap technology themes. That leadership is the reason NQ has been able to stretch so far beyond higher-timeframe expected-move zones.

The problem is that leadership can be right and still be crowded. When the market is already extended, earnings strength tends to produce two types of trades: continuation with acceptance, or exhaustion after a final push. The difference usually shows up in pullback quality.

For Monday, watch whether AI leaders hold bid without needing the entire market to chase. If leadership broadens and RTY holds its stretch zone, risk appetite remains healthy. If leadership narrows while RTY loses its key area, the rally becomes more fragile.

The Plan

Bull Case

The bull case is simple: ES holds above the Q2 +1SD zone, NQ keeps leadership, RTY confirms breadth, and crude remains inside its daily expected move. In that environment, dips can stay shallow and buyers can continue pressing toward upper daily bands.

The best long setup is not the first emotional candle. It is a pullback that holds above a key level, a reclaim after a shakeout, or a clean acceptance build above the prior resistance area.

Bear Case

The bear case is not "the market is too high." That is not enough. The bear case needs rejection.

If ES fails to hold 7,399 - 7,535, if NQ loses its lower daily band, or if RTY falls back below the 2,822 - 2,829 area, the market can rotate from continuation into digestion. If crude accepts above 101.66 at the same time, the risk-off case gets stronger.

Best Trade Location

The cleanest trades are likely to come from the edges:

| Setup | Trigger | First Planning Target | |---|---|---| | ES acceptance long | Holds above Q2 +1SD and builds structure | Upper daily band near 7,535 | | ES failed extension | Pushes above stretch zone and rejects | Daily midpoint near 7,419 | | NQ continuation | Holds above 28,700 and breadth confirms | Upper daily band near 29,964 | | RTY breadth warning | Loses 2,822 - 2,829 | Reduce confidence in broad risk-on | | CL risk trigger | Accepts above 101.66 | Watch equity de-risking impulse |

Bottom Line

Monday's Market Pulse is constructive, but not careless.

The trend is still firm, jobs data helped the bull case, and AI-led leadership keeps NQ dangerous on the upside. But ES, NQ, and RTY have all reached quarterly +1SD alerts. That means the market is not offering cheap location. It is offering a test of acceptance.

Trade the map. Let the first move show whether buyers are accepting higher prices or whether the open is simply trapping late emotion. The best long trades need structure. The best short trades need rejection. The worst trades are the ones taken because the headline sounds obvious.

Want the daily prep room, expected-move levels, and trader accountability before the bell? Join the free PonoTrading prep room.

Read the full Market Pulse on PonoTrading: https://ponotrading.com/blog/market-pulse-may-11-2026

Expected move is not a prediction.

That is the first thing traders need to understand.

It is not telling you where price must go. It is not telling you where price must stop. It is not a magic support or resistance level.

Expected move is the market's volatility budget.

It helps answer a more useful question:

How much movement is the market currently pricing as normal?

Once you know that, the chart becomes easier to organize.

Inside The Range

When price is inside the one-standard-deviation expected range, most movement is still ordinary auction behavior.

That does not mean every trade inside the range is low risk. It means price has not yet done anything statistically unusual relative to the volatility map.

Inside the range, patience matters.

This is where traders often overreact to normal movement. A candle feels large. A level breaks. A pullback looks dramatic. But if price is still inside the expected range, the market may simply be rotating.

The range keeps traders from treating every move like a regime shift.

At The Edge

The expected-move edge is where confirmation becomes more important.

At the edge, price has traveled far enough that the next behavior matters.

Does price accept outside the range?

Does it reject back inside?

Does volatility expand?

Does the move align with higher-timeframe structure?

This is where blind fades and blind breakouts both become dangerous.

The edge is not a command. It is a decision zone.

Outside The Range

Outside the expected range, the market is stretched relative to the current volatility budget.

That does not mean reversal is required.

Strong markets can keep accepting outside the range. News-driven moves can expand volatility. Momentum can carry price farther than the initial map suggested.

But the risk changes.

Continuation outside the range requires respect. Size should reflect the stretch. Stops should not pretend the market is still quiet. Late entries should be judged more harshly.

Outside the range, traders should stop asking whether the market is bullish or bearish and start asking whether price is accepting the stretch.

Why Expected Move Helps With Discipline

Most traders lose discipline because they do not define the playing field before the move happens.

Once price starts moving, emotions take over.

The expected-move map gives the trader a framework before the session begins:

what is normal?

what is stretched?

where does confirmation matter?

where should I be more patient?

where should I reduce size?

That framework does not eliminate uncertainty.

It organizes it.

Expected Move And Market Structure

Expected moves are strongest when they overlap with structure.

A one-standard-deviation edge that lines up with the overnight high, prior day high, weekly level, or major volume area deserves attention.

A two-standard-deviation stretch into a major resistance zone deserves even more attention.

The level by itself is useful.

The confluence is where the map becomes powerful.

That is why expected move should not replace market structure. It should sit on top of it.

The Real Use

Use expected move before the session.

Write down the daily, weekly, and monthly ranges.

Know where price is relative to each.

Know whether the market is inside the map, at the edge, or outside the budget.

Then trade the reaction.

Not the guess.

Expected move is not a prediction.

It is the market's volatility budget.

And once you start seeing it that way, the chart becomes less emotional and more structured.

For daily expected-move context and market prep, join the PonoTrading Prep Room: https://ponotrading.com/join

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How do Earning Effect the Expected Move by Tastytrade.com

Tom and Tony talk about the effect of earnings on the expected move.  The rule:  Except for earnings, get out of the stock before the expected event.  Since this is a discussion about earnings plays, of course you do not have to close before earnings.

The study is on $AAPL, $AMZN, $BBRY, and $CMG and covered 66 earnings cycles, with 30 Days To Expiration.  

Recorded Expected Move to Actual Move.

Here's our first installment of the tickertank.com weekly quiz! The person to correctly answer the question in the comments section of this post will receive a sweet prize! 

Recently we've posted about earnings movements and options prices, including a nice post on how to calculate an expected move before expiration based on the prices of options on the security. Here's the data: 

XYZ November Options

Calls       Strike       Puts

1.75         14          0.50

1.25         15          1.40

0.60         16          1.55

Assume XYZ stock is trading at $15.10

What is the expected range for the stock's price at expiration? We're looking for a low end and a high end.