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Markets Remain Unfazed by the News Cycles
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Our View
The ES traded in an 18-point range for a good portion of the day, following the weakness in the NQ. When the NQ would go bid, the ES would go for the ride, but when it did, the NQ would go offered, and the ES would grudgingly follow. At 2:06 pm the ES made a new low at 6118.25 when the NQ was also making new lows. I thought it was due to a headline, but it turned out to be a low-volume stop run.
Throughout the day, it seemed like there was some type of rotation out of the NQ. but after the low, I told the room that everyone was short. Another one of my trading rules is what I call The Three Parts of the Trading Day:
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What happens on Globex
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What happens after the 9:30 open
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What happens in the last hour
Yesterday was a perfect example of this!
We live in interesting times—right now, the ES seems unfazed by just about everything being thrown at it… the bond market, the ineffectiveness of the Fed, tariff wars, DeepSeek, inflation… you name it. But, as I’ve always said, the S&P tends to take bad news and make good of it. You could see it in the VIX, which traded down to 15.35 late in the day after being above 15.90 earlier. There seems to be zero fear.
As of the close, the ES is up over 4% YTD. It reminds me of a hurricane, it’s not a matter of if it’s going to strike, it’s when. My concern right now is how quiet it is. It reminds me of 2018, when the futures kept pushing higher while the VIX remained suppressed. The PitBull lost $25 million getting out of his short options position and set off “Volpocalypse”. I don’t care what anyone says, after the PitBull got out the LJM fund started covering simultaneously on the CME and the CBOE. It was a bloodbath, and I had a firsthand look at what started it.
I’m not saying history is about to repeat itself, but this happened in February 2018 so it is stuck in my head. I don’t even think the PitBull fully knows the chain reaction, but I know the Chicago prop firms that took the other side of his 25,000 puts did. When LJM started to get out the market makers were told not to take on any size, and that’s how LJM lost $800 million in 24 hours.
Our Lean
Only 1.15 million ES contracts traded yesterday. The 3:50 cash imbalance came out showing $350 million to sell but then flipped to $2.7 billion to buy. That’s why the ES and NQ rallied so much during Part 3 of my Three Parts of the Trading Day rule.
The January Fed minutes are out today, and even if it’s the same stuff we already know, we could get a bump from some of the headlines. I know what I wrote was bearish stuff but the last two weeks of the month are prone to weakness. Will we get some? We could but the ES is targeting new highs and is on its way to 6200.
Our lean: It’s 9:40 PM, and the ES is trading at 6156. There are two ways to approach this. If the ES gaps higher, you can sell the open or early rallies and look to buy the pullbacks. Or, just be patient and focus on buying the dips, which is what I prefer.
MiM and Daily Recap
The ES traded lower in the overnight session, hitting a low of 6137.00 before buyers stepped in and drove prices up to 6157.75 at 8:24. Prices then dropped to 6143.25 to mark the open and then quickly dropped to 6127.50, a -30 point move from the Globex. That price set the morning low, which was revisited later around 14:00. In between, the market chopped within a 10-point range up and down until a move at 13:51 found a hole in the floor and prices dropped to the day’s low of 6118.25. Bulls united from there and ripped up quickly to the chop zone around 6131 for the final hour.
The MiM grew a small imbalance into a 2B buy, and short covering in the last five minutes of the market helped it gain 15 points to settle the day on the high at 6148.
In terms of session performance, the ES closed the regular session at 6148.00, up 4.75 points (+0.08%) from the open, while the full session closed at 6144.75, a modest 2-point gain (+0.03%) over the prior day’s close. Volume total from all three sessions was 1,048,440 contracts.
Overall, the market displayed a firm but choppy tone, with buyers stepping in on pullbacks. The morning rally from the 6137.00 low to the 6157.75 high set the bullish tone, but midday selling briefly tested support before another push higher in the afternoon. Despite some weakness into the close, the ES remained well above the prior day’s lows, reinforcing a constructive outlook.
Technical Edge
MrTopStep Levels:
Fair Values for February 19, 2025:
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SP: 18.54
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NQ: 70.9
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Dow: 100.03
Daily Market Recap 📊
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NYSE Breadth: 66% Upside Volume
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Nasdaq Breadth: 69% Upside Volume
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Total Breadth: 68% Upside Volume
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NYSE Advance/Decline: 59% Advance
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Nasdaq Advance/Decline: 52% Advance
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Total Advance/Decline: 56% Advance
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NYSE New Highs/New Lows: 115 / 52
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Nasdaq New Highs/New Lows: 244 / 123
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NYSE TRIN: 0.65
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Nasdaq TRIN: 0.47
Weekly Market 📈
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NYSE Breadth: 56% Upside Volume
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Nasdaq Breadth: 64% Upside Volume
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Total Breadth: 61% Upside Volume
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NYSE Advance/Decline: 58% Advance
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Nasdaq Advance/Decline: 58% Advance
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Total Advance/Decline: 58% Advance
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NYSE New Highs/New Lows: 235 / 161
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Nasdaq New Highs/New Lows: 428 / 437
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NYSE TRIN: 1.00
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Nasdaq TRIN: 0.55
Guest Posts — Polaris Trading Group
Prior Session was Cycle Day 2: Normal CD2 rhythmic action as price retested the CD1 Low (6131) as outlined in the prior DTS Briefing 2.18.25. “Potential for price to decline and retest CD1 Low (6131) would be our anticipated lean for this cycle day.” Range for this session was 39 handles on 1.048M contracts exchanged.
FREE TRIAL link to PTG/Taylor Three Day Cycle
For a more detailed recap of the trading session, click on this link: Trading Room RECAP 2.18.25
…Transition from Cycle Day 2 to Cycle Day 3
Transition into Cycle Day 3: Having held the CD1 retest and consolidated throughout the day, closing with a firm bid, we would be looking for follow-through to the upside targeting the 6170 – 6175 zone cycle objective as the primary lean.
Failure to extend higher with reversal below 6120 handle negates the rally potential in favor of a deeper decline.
CD3 Average Range = 44 handles
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 6145+-, initially targets 6170 – 6175 zone.
Bear Scenario: Price sustains an offer below 6145+-, initially targets 6135 – 6130 zone.
PVA High Edge = 6142 PVA Low Edge = 6129 Prior POC = 6132
ES (Profile)
Thanks for reading, PTGDavid
Trading Room Summaries
Polaris Trading Group Summary – Tuesday, February 18, 2025
The session opened with an initial upside target fulfilled as per the Daily Trade Strategy (DTS), setting the stage for a structured trading day. Cycle Day 1 (CD1) was confirmed, despite the holiday, with expectations of a narrow range.
Morning Session: Bearish Lean and Execution
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Initial trades leaned toward the sell-side as markets showed signs of weakness.
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Crude Oil (CL) OPR Long target 1 filled early on, showing initial strength in oil markets.
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Short opportunities in NQ and ES played out well:
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NQ OPR short target 1 hit
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ES A4 short executed and filled
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DTS indicated a potential retest of the CD1 low (6131), aligning with the downward bias.
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Midday: Cycle Day Low Holding, Neutral Zone
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A retest of 6131 low occurred, with traders watching for a breakdown.
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No significant new trade edges appeared, prompting a patient approach.
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Market hovered around Mid VWAP, indicating a balanced zone with no strong directional bias.
Afternoon: Late-Day Reversal and MOC Surge
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Initial Balance Low target (6119) was tagged, triggering a buy response.
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Bulls defended the new reference structure low, preventing further decline.
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MOC (Market on Close) order flow flipped sentiment dramatically:
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Started as a $400M sell imbalance, then reversed to a $2.7 billion buy imbalance.
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This sent the market ripping higher into the close, shaking up what had been a relatively quiet session.
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Key Takeaways & Lessons Learned
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Disciplined execution: Shorts in NQ and ES played out according to plan.
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DTS guidance was spot on, particularly in predicting the CD1 low test.
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Patience was key, as midday brought no clear edge, avoiding unnecessary trades.
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Late-session volatility can shift quickly, as the MOC order flow completely changed the market direction.
A classic “hours of boredom followed by moments of stark terror” day—traders who stayed aligned with the dominant force and executed their setups with discipline were rewarded.
Discovery Trading Group Room Preview – Wednesday, February 19, 2025
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S&P 500 Hits Record High: The index surged to an all-time high, with a significant late-session rally. Volatility remains low.
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Gold Nears $3,000: Rising futures prices have triggered substantial physical gold shipments (11 tons last month) from Singapore to the U.S., a rare shift driven by delivery concerns.
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Tesla’s Brand Takes a Hit: Elon Musk’s political moves are affecting Tesla’s (TSLA) reputation. It now ranks as the least favorable EV brand, with German registrations down 60% YoY.
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Intel (INTC) Soars 16%: Market buzz surrounds a potential deal involving Broadcom (AVGO) and TSMC, which could lead to a split of Intel’s operations.
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Tariff Talk: Former President Trump stated that auto import tariffs will be set at 25%, affecting global automakers.
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Earnings Watch: Premarket earnings include ADI, AU, CLH, E, GRMN, HSBC, and others. Post-market earnings feature CVNA, CF, RIO, TOST, VALE, and more.
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Economic Calendar: Light data today, with Building Permits and Housing Starts due at 8:30 AM ET.
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Market Flow: Overnight large trader volume was neutral, and the ES held key short-term support levels.
ES -Week to Week
The intraday bull/bear line for ES today is at 6,143.25. Holding above this level could provide buyers with momentum toward 6,157.75, with a potential push to 6,181.75 as the upper-range target. If bullish momentum strengthens further, a move toward 6,218 could be in play.
If sellers regain control below 6,143.25, expect a test of 6,115.75, which aligns with the lower boundary of the current structure. A breakdown below this level could open the door to 6,104.75 which is the range low target, followed by 6,068.5 as a deeper downside target. Further weakness might bring the market toward 6,046.75 and the lower support at 6,012.
Market participants should watch price action around the 6,143.25 level carefully, as it will dictate directional bias for the session. With recent market consolidation, volatility expansion could lead to sharper moves once a breakout or breakdown is confirmed.
NQ – Week to Week
The bull/bear line for NQ today is at 22,223. Holding above this level could push the market towards the upper target of 22,319, with the extended bullish goal at 22,414 which is the upper range target on the day. If buyers sustain momentum, the market may test the high resistance zone at 22,594.
If NQ fails to hold above 22,223, downside pressure could build toward 22,102. Breaking below this could open the door for a move towards 22,033 which is the lower range target on the day, with further weakness targeting 21,835. The lower range target for today sits around 21,762, which aligns with the moving average support.
Monitor price action around the bull/bear line, as a decisive move in either direction will set the tone for the day’s trend. NQ continues to be in a bullish long-term sequence which would not change until prints below 21,241 print.
Calendars
Today
Important Upcoming
Earnings
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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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