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Late-Day Liquidity Trap: Big Buy Program, Bigger Rug Pull
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Our View
After some early drops, the NQ firmed up, taking the S&P up with it. But after the big 3:50 buy imbalance, the NQ dropped over 100 points and the ES fell 20 points, while $TSLA jumped 3.1% to its first record high since last December, surpassing Broadcom to become the 7th largest U.S. company.
Our Lean
Despite the overall weakness, tech and some AI stocks firmed up. The rotation looked like broader market selling and a move into tech, with the S&P closing down and the Nasdaq closing higher. I’m not sure that this means the sell-off is over, but the markets felt very oversold.
Despite the lack of economic reports, there are three Fed speakers today, and President Trump addresses the nation this evening.
Our lean: Look for a possible pop start on the upside. You can sell the early rallies and buy the pullbacks, or just be patient and buy the weakness.
There should be good support in the 6800 to 6835 area.
Market Recap
Monday night’s Globex session was one of the more volatile trading ranges in a long time. The ESH26 traded down to 6832.75 on Globex, rallied up to 6879.75 at 7:40 a.m., and continued to climb to 6892.00 after U.S. job growth totaled a seasonally adjusted 64,000 new positions—surpassing economists’ estimates of 45,000 and rebounding from a sharp decline the previous month.
The unemployment rate climbed to 4.6%, marking its highest level since September 2021 and exceeding market expectations. A broader measure of underemployment—including discouraged workers and those in part-time roles for economic reasons—rose to 8.7%, reaching its peak since August 2021.
After the data, the ES sold off down to 6862.25 and traded 6861.25 on the regular session open, up 40.74 points or +0.59%. After the open, the ES traded up to 6874.50, sold off down to 6845.75 at 9:48 a.m., rallied up to 6880.50 at 10:03, then sold off down to a new low at 6832.50. It rallied up to 6863.00 at 10:54, sold off down to 6834.50 at 11:36, rallied up to 6858.00 at 12:15, and then sold off down to a new low at 6817.50 at 1:03.
After the low, the ES rallied up to 6854.50 at 1:51, sold off to a higher low at 6825.75 at 2:18, and then traded up to 6873.00 at 3:40. It traded 6864.75 as the 3:50 imbalance showed $3.1 billion to buy, sold off down to 6854.75 at 3:57, and traded 6855.25 on the 4:00 cash close.
After 4:00, the ES traded down to 6845.00 and settled at 6856.25, down 24.75 points or -0.36%. The NQ settled at 25,380.25, up 37.50 points or +0.15% on the day.
At the end of the day, it was another very volatile, choppy two-way trade. In terms of the ES’s overall tone, the NQ acted better than the ES. In terms of the ES’s overall trade, volume was higher at 2.3 million contracts traded.
On Tap
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7:00 a.m. – MBA Mortgage Applications
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8:30 a.m. – Housing Starts
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10:00 a.m. – Atlanta Fed Business Inflation Expectations
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10:30 a.m. – EIA Petroleum Status Report
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2:00 p.m. – FOMC Minutes Release
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2:00 p.m. – Fed’s John Williams speaks
Guest Posts
S&P 500 (ES)
Prior Session was Cycle Day 3: “Range Runners, Soap Slips & IEDs in the Tape”
Tuesday delivered exactly what disciplined traders love and impatient traders hate: a trappy, expiration-tinged Range Runner session packed with head-fakes, V-bottoms, V-tops, and perfectly engineered liquidity grabs.
The Morning Briefing: Levels Don’t Lie
The 6865 battle line — yesterday’s lower target — once again proved to be the session’s defining fulcrum.
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Bull Scenario: Sustain bids above 6865 ± → target 6885–6890
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Bear Scenario: Sustain offers below 6865 ± → target 6845–6840
And in textbook PTG fashion…
👉 BOTH upper and lower target zones were tagged with laser precision.
No predictions. Just execution.
For greater detail of how this day unfolded, click on the Trading Room RECAP 12.16.25 link.
…Transition from Cycle Day 3 to Cycle Day 1
Transition into Cycle Day 1: We begin a fresh new cycle, officially rolling forward into the March (H) 2026 contract. The average decline projection for Cycle Day 1 comes in at 6798.42, setting the tone for a controlled, methodical downside probe rather than a disorderly liquidation.
Post-FOMC rhythms continue to favor a sell-the-rip / sell-the-dip hybrid, with the broader lean progressively lower. That said, this is not a market where the Bulls have abandoned the BTFD religion. Quite the opposite — dip buyers remain very much alive, actively repricing year-end inventory, while motivated sellers look to lighten exposure into strength.
This two-way trade dovetails perfectly with Cycle Day 1’s expected decline structure — the market’s favorite setup for locating a secure low from which to stage the next cycle rally.
⚔️ Key Line in the Sand
6830
Whoever owns this level controls the narrative, dominates the forward structure, and effectively starts writing the year-end storyline.
📈 Upside Levels of Interest
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6860
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6865
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6880
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6890
📉 Downside Levels of Interest
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6805
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6798.42 (Cycle projection)
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6793
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6780
Of course, nothing changes for PTG…Simply follow your plan. Take only Triple A setups and manage the $risk. ALWAYS HAVE HARD STOP-LOSSES in-place on the exchange.
PTG’s Primary Directive (PD) is to ALWAYS STAY IN ALIGNMENT with the DOMINANT FORCE.
As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 6830+-, initially targets 6855 – 6865 zone.
Bear Scenario: Price sustains an offer below 6830+-, initially targets 6805 – 6795 zone.
PVA High Edge = 6864 PVA Low Edge = 6831 Prior POC = 6855
ESH
Thanks for reading, PTGDavid
MiM
MOC Recap
The Market-on-Close auction opened with a decisive buy imbalance that peaked quickly and then transitioned into a more complex, rotational close rather than a clean trend day. At 15:51, total imbalance surged to $3.1B, driven by $5.8B in buy orders versus $2.7B in sell orders, with a +68.4% buy lean. This marked the high-water point for aggressive buying, as participation broadened rapidly to nearly 700 symbols.
From 15:52 through 15:54, buy interest remained elevated, with total imbalance oscillating between $2.9B and $3.5B. The buy percentage consistently held near 68–70%, signaling institutional demand rather than retail noise. However, beneath the headline strength, sell participation stayed persistent, keeping pressure on the tape and preventing a runaway close.
After 15:54, the auction shifted. Total imbalance collapsed sharply to $1.4B by 15:55 and continued lower into the final minutes, reflecting distribution rather than exhaustion. By 15:56–15:59, buy percentages compressed toward the mid-50% range, indicating rotation and internal two-way trade rather than broad accumulation.
The Nasdaq was a strong buy all the way through to the close, with over 70% of the symbols on the exchange having a buy imbalance.
Sector flows reinforced this mixed tone. Technology led dollar inflows at $1.8B total with an +86% dollar lean, but symbol breadth was negative, highlighting concentration in megacaps rather than broad tech buying. Communication Services showed similarly strong dollar dominance, driven by names like GOOGL and META. Healthcare and Consumer Cyclical posted healthy buy leans near 65–73%, while Utilities and Basic Materials also saw steady accumulation.
In contrast, Financial Services, Industrials, Energy, and Real Estate posted decisive sell imbalances, with dollar leans worse than -66%, signaling wholesale liquidation rather than rotation. Financials were particularly notable, with heavy selling in GS, BAC, WFC, AXP, and V.
At the symbol level, megacap tech absorbed the bulk of buying—MSFT, NVDA, AAPL, and AVGO—while banks, insurers, and industrials dominated the sell list. Overall, the MOC reflected strong top-heavy buying offset by broad sectoral selling, producing a firm but internally conflicted close rather than a clean risk-on finish.
Technical Edge
Fair Values for December 17, 2025:
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SP: 58.37
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NQ: 247.03
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Dow: 364.03
Daily Market Recap 📊
For Tuesday, December 16, 2025
• NYSE Breadth: 31% Upside Volume
• Nasdaq Breadth: 54% Upside Volume
• Total Breadth: 51% Upside Volume
• NYSE Advance/Decline: 38% Advance
• Nasdaq Advance/Decline: 45% Advance
• Total Advance/Decline: 42% Advance
• NYSE New Highs/New Lows: 56 / 40
• Nasdaq New Highs/New Lows: 98 / 256
• NYSE TRIN: 1.26
• Nasdaq TRIN: 0.66
Weekly Market 📈
For the week ending Friday, December 12, 2025
• NYSE Breadth: 54% Upside Volume
• Nasdaq Breadth: 52% Upside Volume
• Total Breadth: 52% Upside Volume
• NYSE Advance/Decline: 56% Advance
• Nasdaq Advance/Decline: 49% Advance
• Total Advance/Decline: 49% Advance
• NYSE New Highs/New Lows: 344 / 76
• Nasdaq New Highs/New Lows: 616 / 306
• NYSE TRIN: 1.05
• Nasdaq TRIN: 0.89
ES Levels
The bull/bear line for the ES is at 6855.75. This remains the key pivot for today. Holding above this level keeps the short-term bias constructive, while acceptance back below it would shift momentum back to the downside.
ES is currently trading near 6880.00, rebounding after testing below the bull/bear line overnight. As long as price holds above 6855.75, buyers have room to press toward higher resistance.
The upper intraday range target is 6918.00. Initial resistance sits at 6892.00 and then at 6976.50. A sustained push through 6892.00 opens the door for a test of 6918.00.
On the downside, first support is the bull/bear line at 6855.75. Below that, look for support near 6815.25, followed by the lower range target at 6793.50. A failure to hold 6793.50 would expose deeper downside toward 6734.75.
Overall, the ES tone is neutral-to-firm above 6855.75, with buyers in control while holding this level. A clean break back below the bull/bear line would put the focus back on the lower range targets.
NQ Levels
The bull/bear line for the NQ is at 25,331.50. This remains the key pivot for today. Holding above this level keeps the door open for further upside attempts, while acceptance back below shifts control back to sellers.
NQ is trading near 25,483.50 in the Globex session, above the bull/bear line. As long as price holds above 25,331.50, look for buyers to defend pullbacks toward 25,380.25 and 25,352.75. A failure back below 25,331.50 puts pressure back on the downside.
The upper intraday range target is 25,645.00. Initial resistance sits at 25,444.00. A stronger upside extension would target 25,940.25 if momentum builds.
The lower intraday range target is 25,018.00. Support is layered at 25,380.25, 25,352.75, and the bull/bear line at 25,331.50. Below that, look for downside continuation toward 25,073.25 and 25,018.00. A break of 25,018.00 exposes 24,723.00.
Overall bias is neutral-to-firm above 25,331.50, with sellers regaining control only if price accepts back below the bull/bear line.
Calendars
Economic
Today
Important Upcoming / Recent
Earnings
Upcoming
Recent
Trading Room Summaries
Polaris Trading Group Summary – Tuesday, December 16, 2025
Tuesday was a highly technical, “trappy” trading day dominated by sharp reversals, false breakouts, and heavy liquidity games. Despite the challenges, the PTG room executed with precision, leveraging predefined zones from the DTS briefing and trade plan to score several textbook wins. The key level of 6865 (ES) acted as the central battleground all day.
Key Trades and Wins
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Morning Highlight – Perfect Zone Execution:
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Early in the session, PTGDavid highlighted a flawless reaction off the D-Level Money Box Zone, and both upper and lower DTS target zones were hit “with laser precision.”
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These confluences gave traders clear directional bias, and early longs toward 6885–6890 and shorts toward 6840–6845 were beautifully executed.
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Open Range Strategy:
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Mixed bag:
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CL Open Range Short hit Targets 1 & 2, and was eventually trailed out successfully — a solid win.
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NQ OPR Long and ES OPR Short were both stopped out, reminding traders of the importance of risk management.
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Textbook Trade of the Day – Manny’s 6820–6824 Support Buy:
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Manny stalked the 6820–6824 buy zone from the morning plan.
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Despite several near-misses earlier, he executed flawlessly in the early afternoon, netting a +22 point runner after hitting multiple targets.
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David applauded the preparation and timing: “You nailed it @Manny… and thank you for preparing everyone.”
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Afternoon Action – VWAP “Jam n Slam” and Squeeze Setup:
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The 2 PM “Shake n Bake” move perfectly jammed to VWAP, offering another opportunity for quick scalps.
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David emphasized the need to be early, given how reactive and fast-paced the market was.
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Into the close, the A4 Discount Long was mentioned, with bulls controlling the ball and potential for a squeeze if price cleared Open Range levels.
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A MOC Buy Imbalance of $3.1 Billion briefly pushed prices, but the move was later paired off.
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Lessons & Insights
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Plan Precision = Confidence: The DTS trade zones provided highly accurate turning points. Traders who trusted the plan (like Manny) reaped rewards.
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Patience Pays: Manny waited hours for his setup to come into play. His discipline underscores a key PTG lesson — don’t force trades, let the market come to your level.
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“Trappy” Markets Require Agility: PTGDavid repeatedly warned of the market’s choppy, deceptive nature — false breaks, quick reversals, and liquidation-style moves. Traders had to be nimble or risk being late.
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Risk Management: Despite a few early stop-outs (ES/NQ OPR), losses were well-controlled. Traders who followed stops were free to re-engage later.
David’s Nuggets of Wisdom
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“If you are not early… then you are way late. The train is never on time.”
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“Long Liquidation Alert in-effect!”
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“Range Runner Rhythms… V-Bottoms… V-Tops…”
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“In trappy markets, the nimble traders win.”
In Summary:
Despite some early losses, discipline and alignment with the DTS plan led to excellent trading opportunities, particularly on the Support Buy at 6820–6824 and the VWAP/afternoon squeezes. The market was tough, but the PTG room navigated it skillfully by staying patient, tactical, and tightly aligned to key levels.
Discovery Trading Group Room Preview – Wednesday, December 17, 2025
Morning Market Rundown – Dec 17, 2025
U.S. equities slipped Tuesday following a mixed jobs report, which showed stronger-than-expected job gains but also the highest unemployment rate since 2021. Analysts warn of potential distortions in the data due to the recent government shutdown. The market now sees about a 25% chance of a January rate cut. Fed commentary today could shift expectations ahead of Wednesday’s key CPI release.
Commodities:
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Gold hovers near all-time highs on CPI anticipation and Venezuela tensions.
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Silver surges past $66/oz.
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Oil rebounds from $55 after Trump orders a blockade on sanctioned Venezuelan tankers and U.S. military posture escalates.
Corporate Highlights:
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Micron (MU) reports earnings after the bell, with the AI trade in focus amid a memory chip squeeze.
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SpaceX enters IPO “quiet period,” targeting a $30B raise and $1.5T valuation by 2026.
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Premarket earnings: GIS, JBL.
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Wednesday AM earnings: ACN, CTAS, DRI.
Technical Levels – ES Futures:
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Resistance: 6865/68, 7040/45, 7445/50
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Support: 6383/78
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Key support at the 50-day MA (6850.50); a close below this level could turn the short-term trend bearish.
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ES 5-day ADR now 88.25 points; volatility remains elevated.
Fed Speakers Today:
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Waller (8:15am), Williams (9:05am), Bostic (12:30pm)
10:30am ET: Crude Oil Inventories release.
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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!
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.
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