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Our View

We live in an ever-changing world where nothing stays the same for long. The ES gapped 20 points higher, traded 6407.76 (up 19.50 points on the regular session open), and rallied straight up to a new high at 6427.75. The NQ traded up to 23,337.50. In less than three minutes, Federal Reserve Chairman Jerome Powell will address the nation—and the world—on the direction of the interest rate path. I think the buying could be a bad sign for the shorts.

The headlines just started hitting the tape, and Powell indicated that conditions “may warrant” future interest rate cuts, but emphasized that the Fed would proceed cautiously. Fast forward: the ES just traded up to 6496.75 at 11:33, up 108 points on the day.

After the high, the ES made a few lower highs and then drifted lower as the 3:50 imbalance showed $3 billion to buy, traded 6483.25 on the 4:00 cash close, and settled up 95 points or +1.49%, ending a five-day decline with its best day since late May. The NQ settled at 23,569.75, up 350 points or +1.51%, the YM closed up 861 points or +1.92% to its first all-time high in 176 trading sessions—snapping its longest streak without a record close since a run that ended in December 2023. The RTY Russell 2000 index jumped 3.9%, beating the S&P 500’s daily gain by the widest margin since November. And last but not least, the VIX made a low at 14.21 and settled at 14.22—its lowest level this year.

In the end, I made a rule about this type of price action over 30 years ago: “It takes days and weeks to knock the S&P down, and only one to bring it back.” That is exactly how Fed Friday worked. The ES opened at 6489.25 on Friday, August 15 (part of the 5 consecutive down days), and traded up to 6496.25 that same day.

In terms of the ES’s overall tone, I don’t think I’ve seen more non-stop buy programs since May 27, when the ES closed up 119 points or +2.03% after President Donald Trump announced a delay on new tariffs against the European Union and a stronger-than-expected consumer confidence report.

In terms of the ES’s overall trade, volume was high—but low for the size of the move—at 1.4 million contracts.

The Rack

I don’t know if I explained it correctly when I went live on X Friday, but I was comparing the ‘rack’ on my S&P desk on the floor to how the platform’s ‘ladder’ was designed off the order rack at my CME S&P desk. I went into Google Images and looked up the CME floor for a desk that had a two-sided order rack for all the paper orders we took from customers. I found one, but it didn’t have any orders in it—and ours was longer and packed with orders.

Why was I thinking about it? I was looking at the Delta Trader platform ladder I use when I’m trading the ES and NQ. After the Powell headlines hit and I was watching the offers get swept, it took me back to my floor desk and the order ladder.

The rack was two-sided. The left side was what we called the downside—this held all the paper bids at different price levels (from high bid to low bid), including sell stops. On the right-hand side of the order rack—called the upside—were all the low offers going up the rack from bottom to top, mixed in with buy stops.

Over the five-day decline, and particularly during Tuesday’s and Thursday’s drops, all I could think of were sell stops and sell programs. But when the ladder lit up like a Roman candle after Powell, all I could think of was the offer side of the rack on my desk. Over those five days, all the bids and sell stops got whacked—and in just one day, the upside rack was running buy stops and jamming buy programs at one of the highest rates I’ve seen in a long time.

I’m sure when TT Trading Technologies in Chicago was designing their first futures trading platform, they knew about the up and downside order racks at the desk—and the brokers that held the up and downside decks in the pit.

I know some of the locals in the pit thought if the ES broke down, the pit “could handle it”—but I never thought that. I held off putting the Globex terminals on the desk, but I knew that and the S&P options were the only things left. They still used the racks at the desk before the CME shut the floor due to COVID. A lot of guys thought the floor was going to reopen, but I knew Terry Duffy wanted to close it—and that was it.

So the next time you’re trading and using the ladder, you can think of me on the floor and the order racks—because that’s where it all started.

Never forget….

Our View

If you asked me if I was surprised by the size of the rally? NO!!!!

During that selloff, you never heard me say “AI bubble,” “crash,” “larger drop,” or any of that BS—because I knew. The ES sold off down to 6239.50, down 109.75 points or -1.75% on August 1, and on August 2, the ES closed up 91.50 points or +1.46%.

That seems to be the way these declines end—especially when the PPT is going all in.

The week ahead includes 12 economic reports and three Fed speakers. So far, 96% of the S&P has reported 2Q 2025 earnings. This week typically marks the end of the earnings season, with Nvidia (NVDA) and CrowdStrike (CRWD) reporting on Wednesday. There are a bunch of other companies reporting, but NVDA will be the highlight of the week.

Friday’s Powell headlines were obviously market-moving, but the wildcard was the options expiration. Once the futures started moving up, the short premium sellers—who looked fine on Thursday’s close—were stuck in a Battle Royal on the upside, as hundreds, if not thousands, of buy programs rolled through the stock and equity options markets.

Most clearing firms and IBs have banned the practice, but there are still a few that haven’t—and they tend to wish they had on days like last Friday. As I’ve said many times, I’ve seen the carnage—and it’s never good.

That said, today starts a new week and new possibilities.

Over the weekend, Moody’s Analytics Chief Economist Mark Zandi continued to sound the alarm on the risk of a downturn, warning that states accounting for nearly a third of U.S. GDP are already in a recession or at high risk of slipping into one. Meanwhile, another third is treading water, while the last third is still expanding.

According to the report, Southern states are doing better, while NY and California remain the nation’s economic leaders. The way I see it here in Florida, it has had one of its busiest summers, but I see a lot of very big commercial properties shutting down, and rents on smaller businesses are being edged out by skyrocketing costs.

MiM and Daily Recap

The ES futures opened the overnight Globex session at 6392.00 and initially traded higher, printing a high of 6399.25 at 20:00. This early advance faded quickly, as sellers pushed the contract down to 6385.25 by 20:10. A modest recovery lifted prices back to 6394.75 at 22:10, though the bounce stalled, leading to another dip to 6385.50 at 23:00. A brief uptick to 6390.50 at 00:40 failed to gain traction, and the market rolled over to its overnight low of 6364.00 at 02:40, marking the sharpest pullback of the session. From that point, buyers regained control, driving the ES steadily higher through the early morning. The rally peaked at 6406.00 at 06:30 before easing back to 6398.00 by 07:40. Strength resumed into the cash open, setting the stage for further upside.

The regular session opened at 6407.75 and immediately built momentum.  Buyers drove the contract sharply higher after dovish comments from the Fed Chair, reaching the session high of 6496.25 by 11:30. This surge represented a nearly 100-point rebound off the overnight low and set the tone for the day. A midday retracement pulled prices down to 6473.75 at 12:55, followed by a rebound to 6495.00 at 13:45, just shy of the morning peak. The afternoon trade turned more two-sided, with another low forming at 6474.00 by 15:40 and a modest rally to 6494.00 at 16:00. The regular session settled at 6483.25, up 75.50 points or 1.18% from the open and up 95.00 points or 1.49% from the prior day’s cash close.

The cleanup session added only marginally to the day’s action, closing at 6484.75, leaving the full day higher by 92.75 points, or 1.45%.

The day reflected a strong bullish tone as the ES rebounded sharply from overnight weakness and extended gains through the regular session. The previous close-to-close move of +95.00 points (+1.49%) underscored the shift in sentiment, with buyers clearly in control after the 02:40 overnight low.

Volume was strong, with 1.17M contracts trading during the cash session and 1.34M for the full day, highlighting broad participation. The Globex session added further confirmation of active overnight flows, trading 126,195 contracts.

The Market-on-Close imbalance data showed a sizable buy imbalance of $2.844B at 15:50, with 90.4% of the dollar flow and 70.1% of symbols skewed to the buy side. This extreme reading well above the 66% threshold supported the late-session strength and helped the ES maintain trade near the upper end of its range into the closing bell.

Overall, the session carried a clear bullish bias, marked by strong buying interest, supportive closing flows, and solid volume. With momentum carrying into the cleanup close, the tone into the next session remains constructive, provided buyers defend the 6470–6480 area as support.

How to read the MIM

Technical Edge

Fair Values for August 25, 2025:

Daily Breadth Data 📊

For Friday, August 22

Weekly Breadth Data 📈

For Week Ending August 22

Calendars

Today’s Economic Calendar

This Week’s Important Economic Events

Today’s Earnings

Recent Earnings

Full MTS Calendars

Room Summaries:

Polaris Trading Group Summary – Friday, August 22, 2025

Overview of the Day

This FRYday session was a textbook example of strong directional movement driven by a key macroeconomic event—Fed Chair Powell’s speech at Jackson Hole. The PTG room capitalized early and decisively on the upside, with several traders locking in excellent trades before the market shifted into a grind phase.

Pre-Market Setup

Key Trade Opportunities

Lessons & Takeaways

End of Day Notes

Positive Energy to Close the Week

Summary Verdict:
A high-quality trading day driven by macro catalysts, precision level reading, and disciplined execution. Traders who followed PTG setups and stayed nimble around Powell’s speech were well rewarded.

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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!