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6880 on the Tape, Greenland in the Headlines — Not a Low-Risk Market
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Our View
One of the things I’ve been fairly pointed about is the level of risk in 2026. Here is a list of what I believe are the top 5 risk factors to the U.S. stock market:
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Political instability and policy uncertainty from governance shifts, elections, and foreign interventions.
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Economic slowdown or recession due to weakening labor markets and concentrated growth sectors.
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AI overvaluation with doubts on productivity gains and potential tech bubbles.
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Persistent inflation and uncertainties in Federal Reserve monetary policy.
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Geopolitical tensions, tariffs, and trade disruptions affecting supply chains and profits.
All are part of my “2026 Year of the VIX”
Sunday night, the ES fell further down to 6887.50 during Globex. Monday’s abbreviated trading session saw over 300k contracts traded after Trump’s threat to impose an extra 10% tariff on imports from eight European countries, because they oppose having America take control of Greenland. For me, the question is simple: does it surprise me? No.
I had a discussion with the Pitull about this and told him I don’t think it’s a bad idea. But again, it’s Trump’s approach. He went on to say, “It’s something that has to be done.” I don’t think it’s about a mineral grab. There is a huge security risk from Russian and Chinese expansion — grabbing a foothold and creating military risk in Greenland, which centers on its role as a strategic “high ground.” Russian submarine activity through the GIUK gap could threaten Atlantic shipping lanes, and its location sits on the direct flight path for Russian ballistic missiles targeting North America.
While Russia remains the primary conventional threat, China presents an emerging “dual-use” risk by leveraging scientific research, icebreakers, and satellite ground stations to map the seabed and enhance its missile tracking capabilities. These concerns are magnified by deepening Sino-Russian military cooperation, including joint naval patrols and exercises that signal a long-term ambition to challenge NATO’s dominance in the Arctic.
Russia already has a long-term strategy to dominate the Black Sea, which it views as a strategic platform for global power projection into the Mediterranean, Middle East, and Africa. And China claims sovereignty over 90% of the South China Sea using its “nine-dash line,” which overlaps with the territorial waters of the Philippines, Vietnam, Malaysia, Brunei, and Taiwan. Despite a 2016 international ruling that its claims have no legal basis, China continues to militarize these waters to enforce “navigation by China’s consent.”
I don’t think I’m a cry-wolf kind of guy, but if the U.S. and NATO can’t team up, the vacuum will be a strategic mistake that won’t be able to be undone.
Our View
There is a tendency to cram a lot into a four-session week, and obviously, that’s what we’ll be seeing this week. Between earnings, economic releases (PCE), geopolitics, and headlines, I remain concerned about the overall price action of the stock market as a whole.
As I said, Trump has backed himself into a corner on three separate fronts: Venezuela, Iran, and Greenland. How he balances these issues will continue to impact the markets.
Our Lean
The ES bounced off Sunday night’s Globex lows, but the same question remains: can the ES and NQ hold the rallies?
I do think the 6880–6890 level is key. The historical statistics for the S&P 500 on the Tuesday after Martin Luther King Jr. Day (the first trading day post-holiday) are not positive. Since the market began closing for MLK Day in 1998, the index has averaged a -0.26% return on that day, with less than half of the returns being positive.
In recent years, it has been down on that Tuesday in seven of the last nine years, with average one-day declines around -0.7% over the past decade. This pattern contributes to the overall MLK holiday week averaging a -0.49% to -0.57% return, compared to +0.17% to +0.18% for typical weeks.
My AI levels:
Resistance: 7050+, 7025-7035, 7000-7010, 6975-6985, 6950-6960, 6940-6950 (R2 pivot), 6940-6930 (R1 pivot)
Support: 6900-6910, 6885-6895, 6877-6888 (S1 pivot), 6865-6875 (reversal zone), 6850-6860 (S2 pivot), 6830-6845, 6800-6820, 6770-6780
Guest Post: Tom Incorvia – Blue Tree Strategies
Monday’s holiday-shortened session opened with a downside gap of roughly 1%, placing the market back into a key technical decision area.
As noted last week, price had been pressing into the late-October swing highs. While the market briefly accepted these new levels, the subsequent trade was characterized by stalling momentum and waning participation—suggesting buyers were having difficulty sustaining initiative demand above prior resistance.
Today’s selloff is meaningful because it represents the first sustained test in some time of a prior demand zone, specifically the 6880–6905 area. This region now serves as an important reference point for near-term structure. The market’s response here should be informative: if buyers who accumulated in this zone around January 2 defend the level, we would expect responsive buying, improving tape, and stabilization/rotation back into the prior range. If that demand fails to respond, the break would imply acceptance below support and increase the likelihood of continuation toward lower reference levels.
You can purchase Tom’s Course on Volume Profile here.
Market Recap
The ES traded up to 7007.00 on Globex and opened Friday’s regular session at 6999.50, up 11.75 points or +0.17%. After the open, the ES traded 7002.00, then sold off down to 6960.50 at 10:40. It traded back up to 6995.00 at 11:45, sold off down to 6981.50 at 11:55, traded 6990.00 at 12:20, and slowly traded down to 6978.00 at 1:00.
It then rallied up to 6992.75, pulled back to 6982.75 at 1:55, traded up to 6997.50 at 2:05, and dropped to 6980.00 at 2:45. After that, it moved up to 6990.50 at 2:40, then traded down to 6976.75 and traded 6980.25 as the 3:50 cash imbalance showed $600 million to sell. It then rallied to 6985.25.
After 4:00, the ES sold off down to 6975.00 and settled at 6976.75, down 5 points or -0.07%. The NQ settled at 25,689.00, down 16.75 points or -0.07%. The YM settled at 49,547.00, down 92 points or -0.19%, and the RTY settled at 2,691.20, up 2.80 points or +0.10% on the day and up 9 of the last 11 sessions, with one session only down 0.06%.
In the end, it was exactly what I said in the MTS chat several times: risk-off. In terms of the ES’s overall tone, it couldn’t hold the rallies. In terms of the ES’s overall trade, volume was in line with the last 5 sessions at 1.2 million contracts traded.
On Tap
Tuesday 1/20
$JNJ and $VZ (before open). No major reports scheduled. Fed blackout begins. Trump’s Tariff Ruling.
$TXN reports after the close.
Wednesday 1/21
10:00 am – Construction Spending (delayed report) and Pending Home Sales
$IBM and $TXN report after the close
Thursday 1/22
$BA and $LMT report earnings before the open
Initial Jobless Claims and GDP (first revision)
10:00 am – Personal Income and Spending (delayed report), PCE Index (delayed report)
$TSLA reports after the close
Friday 1/23
9:45 am – S&P Flash U.S. Services PMI
10:00 am – Consumer Sentiment (final)
MiM
Market-on-Close Recap – MiM
The Market-on-Close (MOC) session opened with a modest buy bias near 15:50, showing a +$1.02B total imbalance before quickly flipping negative as sell programs took control. By 15:51–15:54, the auction deteriorated sharply, with total imbalance plunging to roughly -$2.6B at its worst point. This marked the decisive phase of the auction, where institutional sell pressure overwhelmed earlier dip-buying attempts. From 15:55 onward, sell pressure began to moderate, and the tape transitioned into a more rotational and two-sided flow into the close.
Sector-level data highlights that the selling was not uniform. Technology and Communication Services were the clear sources of wholesale distribution. Technology posted a -$659.6M net imbalance with a -59.7% lean, while Communication Services showed an even more aggressive -83.4% lean, signaling near one-way sell programs rather than rotation. Consumer Cyclical also leaned heavily negative at -62.8%, reinforcing the risk-off tone into the close. These sub -66% leans are notable, indicating decisive institutional selling rather than routine rebalancing.
Conversely, several defensive and value-oriented sectors absorbed capital. Energy, Utilities, Industrials, Financial Services, and Consumer Defensive all posted buy leans above +60%, with Energy and Utilities approaching +70%. These readings suggest rotation rather than outright risk-on behavior, consistent with funds reallocating away from growth and into balance-sheet and yield-sensitive areas. Healthcare’s +52% lean further supports this defensive tilt.
At the symbol level, the sell-side was dominated by mega-cap and index-heavy names. MSFT, NVDA, AAPL, META, GOOG, and NFLX all appeared on the top sell imbalance list, confirming that index and ETF-related programs drove much of the pressure. On the buy side, select semiconductors (MU, AMAT), financials (C), and industrials (CAT) stood out, reinforcing the rotational narrative.
Into the final print, the auction settled slightly positive in the final minute, but the broader takeaway remains clear: this was a distributional close in growth, masked by rotation into defensives rather than broad market liquidation.
Technical Edge
Fair Values for January 20, 2026:
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SP: 33.48
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NQ 142.75
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Dow: 179.35
Daily Market Recap 📊
For Friday, January 16, 2026
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NYSE Breadth: 45% Upside Volume
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Nasdaq Breadth: 56% Upside Volume
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Total Breadth: 44% Upside Volume
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NYSE Advance/Decline: 44% Advance
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Nasdaq Advance/Decline: 43% Advance
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Total Advance/Decline: 43% Advance
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NYSE New Highs/New Lows: 181 / 33
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Nasdaq New Highs/New Lows: 242 / 118
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NYSE TRIN: 0.90
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Nasdaq TRIN: 0.59
Weekly Breadth Data 📈
For Week Ending Friday, January 16, 2026
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NYSE Breadth: 53% Upside Volume
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Nasdaq Breadth: 56% Upside Volume
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Total Breadth: 55% Upside Volume
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NYSE Advance/Decline: 63% Advance
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Nasdaq Advance/Decline: 54% Advance
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Total Advance/Decline: 57% Advance
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NYSE New Highs/New Lows: 481 / 62
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Nasdaq New Highs/New Lows: 754 / 290
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NYSE TRIN: 1.51
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Nasdaq TRIN: 0.89
ES & NQ Levels (Premium only)
ES – H26 Levels
The bull/bear line for the ES is at 6979.50. This remains the key pivot for directional bias. Sustained trade below this level keeps pressure on the downside, while a reclaim would be the first step toward stabilizing price action.
ES is currently trading near 6878.00, well below the bull/bear line, confirming a bearish posture and producing a large gap open. Already below the reach level of 6896, the bulls first line of attack is to capture that area and build support and then target up to the lower range target of 6936.5. Further downside could target down to our 2nd pivot level at 6812.50.
If the bulls are able to make a fantastic recovery, they need to make it through resistance at 6960.50 before breaching the 6979.50 bull/bear line. A reclaim and hold above 6979.50 would shift focus higher toward 6986.75 and then 7007.00. The upper range target for the session is 7022.50, which would require sustained acceptance back above the pivot zone.
Overall, the ES remains bearish below 6979.50. Sellers remain in control unless the market can reclaim and hold above the bull/bear line, with downside targets favored while price remains below that level.
NQ – H26 – Levels
The bull/bear line for the NQ is at 25,710.00. This is the key pivot for today. Trading below this level keeps the short‑term tone bearish, while a sustained reclaim would be required to stabilize price action.
NQ is currently trading near 25,250.50, well below the bull/bear line, confirming downside control early in the session. As long as price remains below 25,710.00, rallies are expected to be corrective. The primary downside objective is 25,465.50, followed by 25,235.75. A clean break below 25,235.75 opens the door toward 24,761.50 as the lower extension target.
On the upside, initial resistance comes in at 25,689.00 and then 25,710.00. Above there, sellers are expected again near 25,891.00, with the upper range target at 25,954.25. A move above 25,954.25 would be needed to shift the intraday structure back toward balance, but acceptance above that level is required before assuming any trend reversal.
Overall, the NQ remains bearish below 25,710.00. Until that level is reclaimed and held, the path of least resistance favors continued downside probes and volatile two‑way trade.
Calendars
Economic Calendar
Today
Important Upcoming
Earnings
Recent
Trading Room Summaries
Polaris Trading Group Summary – Friday, January 16, 2026
Friday’s session was approached with caution as expected, being both Cycle Day 3 and Options Expiration (Opex) day—a combination that PTGDavid emphasized as a “Wild Card” session. Capital preservation was the dominant theme, with a light trading bias encouraged. Despite the potentially choppy conditions, the room executed strong trades early, with both bull and bear case targets hit, demonstrating effective planning and alignment.
Key Pre-Market Insights:
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Cycle Day 3 Wild Card + Opex Friday = reduced predictability and high potential for fakeouts.
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David’s guidance was clear: “Capital Preservation Day” – protect gains, avoid overtrading.
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Bull Case above 6985 targeted 6995–7005.
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Bear Case below 6985 targeted 6975–6965.
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Noted market behavior likely driven by positioning games over pure price discovery.
Notable Trades & Execution Highlights:
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Manny led with a standout Support Buy at 6984–6988, beautifully aligned with David’s bull case plan. This yielded:
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+5 points early in the session (“BOOM!!!” as he called it).
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Chart shared for transparency.
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7000 offer filled for +10 — another strong long-side execution.
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Bear Case Targets 6975, 6970, 6965 all hit — confirming David’s levels and planning.
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David confirmed: “ALL DTS Bear Targets fulfilled.”
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CL & NQ Open Range Targets also hit — showing breadth in market opportunity beyond ES.
Lessons & Takeaways:
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Pre-session planning and alignment between David and Manny highlighted the power of multiple perspectives leading to confirmation bias in favorable ways.
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Post-trade review and education emphasized heavily:
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“Spend AT LEAST as much time planning and reviewing as you do actually trading.” – Manny
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“Watch film.” – Ram
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Manny noted his enjoyment of analysis and planning – reinforcing that passion for review leads to consistency.
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Dynamic D-Levels discussed as a valuable tool – some traders exploring deeper integration.
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Slatitude39 shared his experimentation with scaling out at +3, +5, +8 — showing growing trade management sophistication in the room.
Late Session Notes:
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Price hit key targets early, leading to a quieter afternoon session.
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3:21 PM: David asked, “$De-risk for the long weekend?” – a subtle reminder to not give back gains in thin markets.
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MOC Sell Imbalance came in at $600M — described humorously as “Mice Nutz,” implying limited impact.
Summary:
Despite the “Wild Card” nature of the session, the PTG Room traded disciplined and strategically. Early alignment led to excellent trade opportunities on both the bull and bear side. Targets were fulfilled across the board, validating the pre-market planning. Traders were reminded of the value in review, planning, and risk management, especially ahead of a long weekend. A solid wrap to the trading week with gains booked and lessons reinforced.
Discovery Trading Group Room Preview – Tuesday, January 20, 2026
Macro & Geopolitical Focus:
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President Trump escalates tensions at Davos, pushing NATO tariffs unless nations agree to U.S. acquisition of Greenland.
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Europe retaliates with $108B in tariffs; France suggests deploying EU’s “anti-coercion instrument.”
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Europe holds $8T in U.S. assets — weaponizing capital poses significant market risk.
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“Sell America” trade intensifies, pressuring the U.S. dollar and dollar-denominated assets.
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Trump’s proposed “Board of Peace” draws backlash over governance structure and $1B country fee.
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Putin’s proposed inclusion on the board raises further alarm among global leaders.
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Iran unrest worsens: 5,000+ dead in nationwide protests expanding beyond economic grievances.
Market & Technical Overview:
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ES Futures sold off overnight, breaking 3-month range.
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Price action tested short-term uptrend channel support (6924/29) — now acting as resistance.
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Hovering near 50MA (6892.25), a key support zone; break below may trigger a fresh bearish leg.
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Volatility uptick expected following long-weekend drop.
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5-day ES ADR: 65.75 points
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Whale bias: Short into U.S. open on moderate large-trader volume.
Key Technical Levels – ES:
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Trendline Resistance: 7047/52, 7182/87
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Trendline Support: 6924/29, 6455/50, 6235/30
Earnings Calendar:
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Premarket: MMM, DHI, FAST, FITB, KEY, USB
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After Close: IBKR, NFLX, UAL
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Wed AM: HAL, JNJ, SCHW, TRV, TFC
Other Notes:
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No major economic data scheduled for today.
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Trump to speak at WEF in Davos on Wednesday @ 8:30am ET.
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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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