on August 1, 2025

This post goes out as an email to our subscribers every day and is posted for free here around 2 PM ET. To get your real-time copy, sign up for the free or premium version here: Opening Print Subscribe.

Follow @MrTopStep on Twitter and please share if you find our work valuable!

Our View

Market Recap

Globex High: 6468.50
Globex Low: 6424.25
9:30 Open: 6446.75
Day Session Low: 6368.50
3:50 Imbalance: Buy $1.1 billion
4:00 Print: 6371.00 (-1.18%)
5:00 Close: 6368.75
Total Volume: High at 1.87 million

The day after a gap-up open and a 50-point sell-off from high to low—followed by an explosive rally to new highs after MSFT and META reported earnings—the ES rallied up to 6468.50 early Thursday. It opened at 6446.75, initially sold off, then rallied back up to 6435 , and not long after, I put up my new gap rule:

IMPRO: Dboy (9:34:11 AM): the new gap rule says that even if selling the gap up doesn’t work it sets up a sell-the-rallies environment.

Look, I may not always trade it the way I see it, but I wish I did. I sold the open, covered off the first low, and then watched it really closely but didn’t resell it. When you add in weak seasonalities and the sheer number of new highs, even the PitBull is sounding the alarm.

I’m not an economist, but it looks like the boys with better seats have been taking some cash off the table. After the 6368.50 low, the ES chopped around in a 6-to-8-point range and briefly popped up when the MIM came out with $1.2 billion to buy and then sold off back down to around 6375. I tried buying the ES a few times and got out with small losses before I started rebuying at 3:56, right in front of AMZN and MSFT reporting their earnings. I immediately put in higher offers—and then futures ripped higher after AMZN suprassed analysts’ expectations and Microsoft beat expectations on both the top and bottom-line estimates, driven by the strength of its cloud revenue. That took me out on my offers, and the ES sold back down.

In the end, I think the “sell the rally” price action that started earlier in the week was tied to the end-of-July rebalance: buy bonds, sell stocks. On both Wednesday and Thursday, bonds were going up while the S&P was going down.

In terms of the ES’s overall tone, it was a day of failed rallies—despite the earnings pops. In terms of the ES’s overall trade, volume was high at 1.87 million contracts traded.

PITBULL

Everyone knows I love the PitBull. He saved my life back in January when he paid for a concierge doctor after I got endocarditis, a blood disease caused by getting my teeth cleaned. He also helped me after the $10 million FLASH CRASH hit. I told him a long time ago I’d return his goodwill “whenever he needs me.”

In the beginning, when he first started using my desk, I knew he liked the way I treated him. He told me about a broker in the S&P pit named Bill D., who retired early from bucketing PitBull’s trades, or going with him if he was long or short. I can’t even imagine what that looked like before I took over the business, because Marty made money—not on one or two trades, but with 10 or 15 winning trades in a row.

He had a rule that he MUST make at least $10k a day, and boy, on those rare days we didn’t… he would be so hard to deal with, I wanted to punch him in the face through the phone.

In the Norm Zadeh trading championship, he put on the show of shows. In nine of the ten four-month contests he entered, he made more money than all the other contestants combined. His average return in those nine contests was 210% (non-annualized). In his one-year contest, he achieved a 781% return.

While the PitBull still swings the bat (large), he’s slowing—but he’s still fighting. He told me the other day he wished he had taken my advice about pulling $50 million out of the $35 million account he ran up to $105 million. I think he’s been reflecting more. When he gets back, we’re planning to do a few podcasts. I’ve always done my best to push his name and work because I believe that, as we get older, younger traders can still learn a ton from him.

Like the foreword in William D. Falloon’s Charlie D.: The Story of the Legendary Bond Trader says: “Don’t forget your roots, and make sure you take time to help the next young trader learn, just as someone helped you. Charlie D. knew these lessons well.”

I think we all want to make our mark—whether as a good person, doctor, plumber, teacher, or trader. We can all learn things from the great traders, not just about how much money you can make, but how to stay humble while doing it.

TRUMP

It never fails. Around 9:00 p.m., this hit the tape:
U.S. Tariffs: Australia 10%, New Zealand 15%

I know the administration thinks it’s doing a good job, but I don’t get blowing everything up with a foghorn. How is this sustainable? The U.S. is already losing friends, and many countries aren’t responding to the threats. Of the 150 countries targeted, only 75 have signed deals.

Is Trump firing from the hip, or is there actually a plan? If there is, it sure doesn’t look like it to me.

Personally, I’m sick of it. For the last 20+ years, the U.S. has been trying to improve relations with India as a backstop to China. Over the last few years, that relationship has improved. And now Trump slaps tariffs on them, then strikes a trade deal with India’s arch-enemy, Pakistan. The deal includes increased investment, expanded market access, and help in developing their “massive” oil reserves.

I’m not sure why you’d want to pick a fight with the most populous country in the world—but that’s Donald.

Our Lean

Yesterday, I said I wanted to sell the early rallies—that was spot on. But buying the dips didn’t work very well.

Today is the first trading day of August, and we’ve got a lot on deck: the July jobs report, PMI, ISM, construction spending, auto sales, and TV appearances from Cleveland Fed President Beth Hammack and Atlanta Fed President Bostic. Plus, it’s Friday options expiration. I suspect it will be another busy day.

Our lean: While the jobs number today is important, I think the high level of Trump tariff headlines is spooking the markets.

If the ES is down hard on the open, I would look to be a buyer, but there are an abundance of sell stops below. 6350 is key—if the ES starts breaking that level, I have 6320, 6300, 6280-75, and 6255 as downside levels to watch.

On the upside, I have resistance at 6380-85, 6403, 6412, 6318, 6430, 6451, and 6376. I can’t rule out buying a big gap down, but based on the weak price action, I would not be surprised if we see lower prices.

Job Estimates

Goldman Sachs: Expects July nonfarm payrolls to rise by 100,000. Private hiring to rebound modestly, government payrolls flat. Unemployment rate projected at 4.2%, with average hourly earnings up 0.25% MoM.
Bank of America: Forecasts a 60,000 increase in nonfarm payrolls, below the 100,000 Dow Jones consensus. Private payrolls up 85,000 from 74,000 in June. Government payrolls down 25,000 due to seasonal distortions. Unemployment rate between 4.1% and 4.3%, with a figure closer to 4.3% print signaling possible labor market slack.
Citigroup: Cautiously expects a 70,000 to 100,000 job gain for July, with the unemployment rate ticking up to 4.3% or higher, from 4.1% in June.

Guest Posts:

SpotGamma Founders Note:

Get instant access to our partners’ real-time market data and insights not available anywhere else. Here is last night’s Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. – MrTopStep

Futures are 1% lower, with NFP and PMI on deck. AAPL is +1.5% premarket, with AMZN -7%.

You can see to the downside of 6,300 is where things get more directionally spicy, as this is where gamma is predominantly negative. Its not hugely negative, but it is negative vs >6,300 is more of a mixed bag. Its also above 6,300 where we’ve seen large 0DTE options sellers step up, which adds local positive gamma (i.e. gamma around ATM).

Vol is unsurprisingly higher, with 1-month IV about 1/2 a vol point up. Thats not terribly large considering the 1-2% decline over the last session, and given the upcoming NFP/ISM data. 0DTE ATM IV is 31%, which is pretty heavy (its been near 20%), but some that is simply due to “skew slide” or the fact that ATM options were near 6,400 yesterday, and now ATM is 6,280 (upside SPX options naturally have lower IV’s).

Get instant access to our partners real-time market data and insights not available anywhere else. Here is last night Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. – MrTopStep

MiM and Daily Recap

The overnight Globex session began with a steady bid, rallying from the prior settlement of 6403.50 to an early high of 6446.75 at 7:10 PM. A brief pullback to 6439.25 at 8:05 PM set the stage for another leg higher, with price printing successive highs at 6459.25 by 12:40 AM and again at 2:00 AM. After a modest dip to 6453.25 at 1:30 AM and a lower low of 6452.00 at 2:30 AM, the ES launched into a final push to the session high of 6468.50 at 3:45 AM. From there, the tone softened, slipping to 6455.50 at 5:35 AM, then lower to 6448.75 by 7:10 AM. The Globex session ultimately closed at 6446.75, up 11.25 handles (+0.17%) from its open and holding that 38-point gap up.

The regular session opened at 6446.75 and immediately began to roll back into the morning, driving ES down to 6427.50 by 9:45 AM, then sharply lower to 6402.25 at 11:15 AM. A midday bounce lifted the tape to 6435.25 at 12:30 PM, but the upside was quickly capped. Sellers regained control, dragging the market to a fresh low of 6365.50 by 2:15 PM. Another reflex rally to 6403.00 at 2:45 PM gave way to renewed selling, with ES falling to 6358.25 by 3:55 PM. The session closed at 6371.00, down 75.75 handles (-1.18%) from the open and off 26.50 points (-0.41%) from the prior cash close.

Cleanup session trading was muted, opening at 6371.25 and holding within a narrow range before settling slightly lower at 6368.75, a 2.50-handle dip.

For the full session, ES shed 66.75 handles (-1.04%) from the prior close, settling at 6368.75.

Market tone was decisively bearish during the regular session, as a failed attempt to hold overnight gains gave way to broad-based liquidation throughout the day. Selling was persistent, with every bounce attracting supply. The largest intraday drop occurred during the early afternoon when price collapsed 69.75 handles (-1.08%) from the 12:30 PM high to the 1:15 PM low.

Volume was robust with 1.87 million contracts traded across all sessions, notably above recent averages. Liquidity thinned toward the close as sellers maintained control into the bell.

At 3:50 PM, the Market-On-Close (MOC) imbalance showed a strong buy imbalance of $5.9 billion versus $2.4 billion in sell orders, for a net positive of $3.476 billion. The buy dollar percentage stood at 71.0%, while 58.1% of symbols showed buying pressure.

Top MOC buy imbalances were in:

NVDA with ~$2B paired volume and strong buy side,
TSLA, BRK.B, GOOGL, and MSFT all showing significant MOC buy interest.

Largest MOC sell imbalances included:

AMD at -$139M,
META, BMY, and CHMP also showing heavy sell pressure.

Overall, Thursday’s action confirmed a shift in sentiment, with the ES firmly rejecting the overnight highs and closing near session lows. Heading into Friday, traders will be watching for potential continuation lower or a technical rebound from oversold intraday levels.

How to read the MIM

The bull/bear line for the ES is at 6389.75. This is the key level that must be reclaimed for bullish momentum to resume. Below this line, the market remains in a bearish stance. Currently, ES is trading around 6310.75, indicating continued weakness in the overnight session.

Downside targets include 6343.00 as major support, but now resistance, followed by the lower target at 6299.00. A break below 6299.00 would expose deeper support at 6208.50. Any rally attempts will face initial resistance at 6357.50, then 6374.25.

A move back above 6389.75 would shift sentiment and open the door for a test of higher resistance levels. If bulls can reclaim and hold above the bull/bear line, the upper range target at 6480.50 becomes the next key objective, with interim resistance levels at 6449.00 and 6468.50.

Clawing back to 6389.75 would be a goal for the bulls, extending to 6299 a goal for the bears.

The bull/bear line for the NQ is at 23,446.00. This is the key pivot that must be reclaimed for bullish momentum to resume. As long as NQ remains below this level, sellers remain in control.

Currently, NQ is trading around 23,108.00, well below the bull/bear line. The lower range target for today is 23,230.75, which has already been breached. Continued weakness below this level opens the door for a test of deeper support at 23,028.00 and possibly 22,610.00 if selling pressure intensifies.

On the upside, if NQ can reclaim 23,446.00, we may see a push toward 23,661.25, with 23,845.00 as the upper range target. That level must be cleared and held for bulls to gain confidence in a broader recovery.

Technical Edge

Fair Values for August 1, 2025

SP: 29.92
NQ: 128.23
Dow: 142.15

Daily Breadth Data 📊

For Thursday, July 31, 2025

NYSE Breadth: 31% Upside Volume
Nasdaq Breadth: 36% Upside Volume
Total Breadth: 35% Upside Volume
NYSE Advance/Decline: 40% Advance
Nasdaq Advance/Decline: 34% Advance
Total Advance/Decline: 36% Advance
NYSE New Highs/New Lows: 97 / 69
Nasdaq New Highs/New Lows: 200 / 159
NYSE TRIN: 1.31
Nasdaq TRIN: 0.88

Weekly Breadth Data 📈

Week Ending Friday, July 25, 2025

NYSE Breadth: 58% Upside Volume
Nasdaq Breadth: 65% Upside Volume
Total Breadth: 63% Upside Volume
NYSE Advance/Decline: 66% Advance
Nasdaq Advance/Decline: 61% Advance
Total Advance/Decline: 63% Advance
NYSE New Highs/New Lows: 273 / 62
Nasdaq New Highs/New Lows: 609 / 157
NYSE TRIN: 1.40
Nasdaq TRIN: 0.83

Calendars

Economic Calendar Today

This Week’s High Importance

Earnings:

Full Calendars

Trading Room News:

Polaris Trading Group Summary – Thursday, July 31, 2025

Morning Overview

No pre-open briefing as David had a medical appointment, but charts were active.
Market opened with a sell-side lean off the 3-day D-level high.
6446 VWAP and 6435 VAL emerged early as key rotational levels.
Initial short idea was neutralized, but sellers returned and pushed through 6435 toward 6425, a key support.

Key Trade Developments

David identified 6425 as a “line in the sand.” Once broken, he projected the next bear zone target at 6415–6410.
Price moved with precision through the targets, ultimately reaching 6393.25 — David’s projected CD1 low.
The D-Level Money Box (DLMB) zone provided a highly effective setup that lined up perfectly with the Cycle Day 1 decline.
The @NQ Open Range short fulfilled all targets, marking another confirmed setup.
Afternoon saw a test and reversal at the FOMC low, adding a reversal trade opportunity.

Lessons and Coaching

David emphasized trading reality: even great setups can fail; trading is probabilistic, not certain.
Quote of the day: “When structure shifts… shift with it.”
Real-time instruction around DLMB zones helped traders understand how levels are formed and used.
John B and Roy both engaged actively in discussion, illustrating the room’s value for education and process.

Late-Day Action and Close

Market delivered a final leg down into the close, matching a textbook Cycle Day 1 decline structure.
MOC imbalance showed a $3.7B buy, but price closed near the lows.
Final bounce attempt off 6366 was noted as a possible “Hail Mary” long for only the most aggressive traders with little time left in the session.

Summary

Day featured precision in target hits and disciplined execution of short setups.
DLMB zones and Cycle Day expectations gave clear structure for high-probability trades.
Trader development and education remained a strong part of the session.

DTG Room Preview – Friday, August 1, 2025

Tariff Watch: The August 1 tariff deadline is in focus, reigniting trade concerns. Trump’s promised “90 deals in 90 days” remains unfulfilled. New tariffs targeting pharma, semiconductors, and key minerals are expected. Legal challenges to executive-order tariffs are ongoing. Bloomberg estimates the average 12.8% tariff hike could dent U.S. GDP.
Corporate Earnings: Apple beat expectations on strong iPhone sales. Amazon also beat but missed on cloud, sending shares down 8% AH. Exxon and Chevron both posted strong profit beats. Premarket earnings include names like CVX, XOM, KMB, MRNA, REGN, and TROW.
Economic Calendar: Key data today includes the July Jobs Report (8:30am ET), followed by S&P Global Manufacturing PMI (9:45am), ISM Manufacturing, UoM Sentiment and Inflation Expectations, and Construction Spending (all at 10:00am ET).
Market Action: Volatility is rising with downside momentum picking up. ES retraced into its short-term uptrend channel—offering opportunities for both bulls and bears. Watch trendline resistance at 6504/09 and 6553/58; support at 6230/35, 6172/77, and 5720/25. No clear whale bias in overnight volume.

Affiliate Disclosure: This newsletter may contain affiliate links, which means we may earn a commission if you click through and make a purchase. This comes at no additional cost to you and helps us continue providing valuable content. We only recommend products or services we genuinely believe in. Thank you for your support!

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!!