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Our View

Artificial Intelligence Anxieties

Yes, the NQ closed near its highs, the ES finished essentially unchanged, and the YM ended its three-day winning streak, but AI-related worries persist despite the massive infrastructure bets.

Major hyperscalers are ramping up capital expenditures aggressively for AI data centers, GPUs, servers, and cloud capacity: Amazon plans $200 billion, Alphabet (Google) $175–$185 billion, Meta $115–$135 billion, and Microsoft is on pace for $100–$145 billion (often cited around $145 billion based on run rates). Yet this unprecedented combined spending surge (projected at $635–$700 billion across the group) hasn’t lifted the cloud of concern among investors, who remain wary of cash flow pressures, delayed profitability from AI monetization, potential overcapacity risks, and recent stock volatility tied to these announcements.

With the exception of TSLA and NVIDIA, the Magnificent 7 were not so magnificent yesterday. META was –0.30%, AMZN was –1.39%, TSLA was +0.72%, GOOGL was –2.42%, NVDA was +0.86%, AAPL was +0.67%, and MSFT was –2.15%. The combined market cap loss over the last two sessions is nearly $700 billion and has shed nearly $3 trillion from its February high. I’m not smart enough to figure this out, but as I have been saying since the AI bubble talk, I think there has been selling going on under the surface since October 2025.

Our Lean

Traders can think whatever they like, but between algorithmic, HFT, and AI, the bots have turned the trade into a giant auto bot that, if you get on the wrong side, you just get run over by the hundreds of programs. The ES has been down 8 of the last 11 sessions, and the NQ has been down 6 of the last 10 sessions, down 4.05% YTD. It’s hard to overlook the price action.

Our lean: it seems like you can buy the lower opens and sell the higher opens. After yesterday’s drop, I think you can buy the early weakness if the futures open lower, but I have to admit I’m becoming a pessimistic bull. Keep an eye on yesterday’s low of 6930.00.

Support and Resistance Levels:
Pivot Point 2nd Level Resistance: 7048.17
Pivot Point 1st Resistance Point: 7004.33
Price 3 Standard Deviations Resistance: 6980.26
Price 2 Standard Deviations Resistance: 6976.63
Price 1 Standard Deviation Resistance: 6971.91
Price 1 Standard Deviation Support: 6949.09
Price 2 Standard Deviations Support: 6944.37
Price 3 Standard Deviations Support: 6940.74
Pivot Point 1st Support Point: 6923.83

The Kobeissi Letter
@KobeissiLetter

This data is incredible: 0DTE options now command a record ~78% of daily Nasdaq 100 volume (up 23 points since 2024) and ~65% of S&P 500 volume. They also account for nearly 60% of volume in $QQQ and $SPY, followed by $IWM at ~40%. Collectively, 0DTEs represent a record 55% of volume across these assets—up from 38% in 2024—signaling that risk appetite is through the roof.

Key Takeaways

Nasdaq 100: 78% volume (Record high)

S&P 500: 65% volume (Up from 50%)

ETFs ($QQQ/$SPY): ~60% volume

Aggregate: 55% of all activity is now same-day expiration.

Guest Posts:

Market Recap:

The ES made a low at 6962.75 and rallied up to 7008.75 on Globex and opened Wednesday’s regular session at 7003.75.

After the open, the ES rallied up to 7011.50 and then dropped 81.50 points down to 6931.00 at 10:25, rallied up to 6966.50, sold off down to a higher low at 6953.00 at 11:05, rallied up to 6974.25 at 11:20, and sold back off down to 6954.50.

The ES then rallied up to 6973.25, sold off down to 6953.25 at 12:00, rallied up to 6979.75 at 12:50, and sold back off down to 6953.50 at 1:15. It did a sideways-to-up back-and-fill, rallied back up to a lower high by two ticks at 6979.25 at 2:25, and pulled back to 6963.50 at 2:45.

The ES traded back up to 6972.00 at 3:50 and then stutter-stepped down to 6965.50 at 3:30, rallied back up to 6968.75 at 3:40, and traded the same as the 3:50 imbalance came out flat. It sold off down to 6961.50, rallied back above the VWAP at 6969.75, sold back off down to 6963.25 at 3:57, and traded 6958.75 on the 4:00 cash close.

After 4:00, the ES traded up to 6968.00 at 4:45 and settled at 6960.50, down 1 point or -0.01%. The NQ settled at 25,288.50, up 70.25 points or +0.28%, and the YM settled at 26,675.60, down 12.70 points or -0.47%.

In the end, I think the stronger-than-expected jobs number, 130k nonfarm payroll, slowed expectations of a near-term rate cut and the continued weakness in the AI and tech software stocks that started Tuesday followed through yesterday.

In terms of the ES and NQ’s overall tone, after a small bump up after the open, both sold off but rebounded. In terms of the Es’s overall trade, volume was higher at 1.453 million contracts traded.

Polymarket and Trump’s Tariffs

Like many things when it comes to the markets, this one seems to have fallen off the truck: the Supreme Court ruling on the legality of Trump’s tariffs.

On Tuesday, Supreme Court Justice Ketanji Brown Jackson dampened expectations for a swift court-mandated refund of President Donald Trump’s recently imposed tariffs. Jackson said that any legal challenge involves “lots of nuanced legal issues” and that drafting a ruling takes considerable time due to the constitutional complexities.

Prediction market traders reacted swiftly, with Polymarket odds that the Court will force Trump to refund the tariffs crashing to 28% (down from a recent high of 39%) on a contract expiring June 30. Jackson’s remarks underscore that the justices, currently in recess until February 20, are in no hurry to narrow the window for a decision—let alone the logistical challenges of issuing widespread refunds—while Trump has warned an unfavorable ruling could cost the U.S. hundreds of billions or even trillions in repayments.

MiM

The February 11th MOC session opened with a modest $3 million buy imbalance at 15:50, quickly flipping to a $15 million sell at 15:51 before surging to a $192 million buy at 15:52. That early whipsaw set the tone for a rotational close. By 15:54, the imbalance peaked near $838 million to buy, then steadily bled lower into 15:59. The final 16:00 print showed a $692 million buy imbalance with a sharp jump in $PCT to 69.2%, signaling a late institutional push rather than steady accumulation throughout the window.

Despite the late buy skew, the broader tape leaned mixed. All Markets closed at -$14.57 million net, with sells marginally outweighing buys. The S&P 500 finished with a -$105.53 million imbalance and Nasdaq at -$83.42 million, both reflecting index-level pressure. NYSE, however, closed +$87.96 million, highlighting divergence between old-line and growth-heavy names.

Sector flows showed clear pockets of wholesale activity. Energy led decisively with +82.5% and +66.7% by symbols, indicating broad-based institutional buying. Real Estate (+64.5%), Healthcare (+63.0%), Utilities (+66.4%), and Basic Materials (+66.7%) also leaned strong to the buy side, suggesting defensive and hard-asset accumulation. In contrast, Consumer Defensive (-77.4%) and Financial Services (-65.8%) reflected heavy distribution, with Financials also showing -50.5% symbol participation — a notable wholesale unwind. Technology printed -55.2%, more rotational than extreme, but the symbol breadth at -51.5% confirmed internal weakness.

Single-name flows were concentrated. NVDA (+$174M), MSFT (+$162M), AMZN (+$147M), META (+$145M), and V (+$127M) dominated the tape. PANW (+$209M) and TSLA (+$119M) added to the growth bid, while energy names like VLO and CVX confirmed the sector strength.

Overall, the MOC reflected rotation beneath the surface: defensive and energy accumulation offset by financial and consumer defensive selling, capped by a late institutional buy program into the bell.

How to read the MiM

Technical Edge

Fair Values for February 12, 2026

Daily Breadth Data 📊

For Wednesday, February 11, 2026

• NYSE Breadth: 52% Upside Volume
• Nasdaq Breadth: 52% Upside Volume
• Total Breadth: 52% Upside Volume
• NYSE Advance/Decline: 54% Advance
• Nasdaq Advance/Decline: 38% Advance
• Total Advance/Decline: 44% Advance
• NYSE New Highs/New Lows: 417 / 80
• Nasdaq New Highs/New Lows: 355 / 270
• NYSE TRIN: 1.07
• Nasdaq TRIN: 0.56

Weekly Breadth Data 📈

For the Week Ending Friday, February 6, 2026

• NYSE Breadth: 55% Upside Volume
• Nasdaq Breadth: 49% Upside Volume
• Total Breadth: 51% Upside Volume
• NYSE Advance/Decline: 61% Advance
• Nasdaq Advance/Decline: 44% Advance
• Total Advance/Decline: 50% Advance
• NYSE New Highs/New Lows: 548 / 184
• Nasdaq New Highs/New Lows: 678 / 809
• NYSE TRIN: 1.27
• Nasdaq TRIN: 0.81

Economic Calendar Today

This Week’s High Importance

Earnings:

Recent

Full Calendars

Trading Room News:

PTG Room Summary – Wednesday, February 11, 2026

Yesterday was a strong expansion session following Tuesday’s balance, with Cycle Day 3 delivering high-probability Open Range and gap fill opportunities. While the primary lean was long above 7000, the market provided an early short setup that triggered “Godzilla” OPR trades in ES and NQ. Execution, scaling discipline, and trailing stops defined the day, with multiple members locking in significant wins. It was a textbook example of structure first, bias second.

Market Context & Plan

Open Range & Gap Fill Execution

Lessons Reinforced

End-of-Day Tone

Bottom Line

Yesterday transitioned from early rotational opportunity into decisive expansion, rewarding traders who followed structure rather than narrative. The room demonstrated patience, scaling discipline, and execution consistency — exactly what Cycle Day 3 is designed to provide.

DTG Room Preview – Thursday, February 12, 2026

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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!