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Thin to Win and S&P 6500
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Our View
I started doing a small recap, but I just can’t do the highs and lows stuff. Like the PitBull said, the dog days of summer don’t start in August—they started July 1st.
During the selloff, ES volume jumped to 3.678 million contracts on April 4. It’s now fallen below 900k to 1.1 million contracts on a good day, and that includes Globex volume. There are eight more trading days in July, and August is known as the last-ditch time to take the kids on vacation before school resumes after the 15th.
But the lack of volume and grind time isn’t just about summer, or kids going back to school. It’s about the S&P being “too high to buy and too firm to sell.” I also think investors have become accustomed to Trump’s tariff tantrums, and their effect on markets is fading. It’s now 3:24 p.m. and the ES volume is only 720k. NO ONE IS TRADING!
In the end, the yield on the 10-year note fell to 4.37%, which supported the NQ and chip sector, pushing the Nasdaq to its 12th new high of 2025. In terms of the ES’s overall tone, the NQ was the leader. In terms of the ES’s overall trade, volume was LOW with only 893k contracts traded.
The Fed
Today, Fed Vice Chair for Supervision Michelle Bowman has an TV interview at 7:30. Fed Chair Powell deliveres opening remarks at the Integrated Review of the Capital Framework for Large Banks Conference in Washington, D.C. at 8:30, and Bowman is set to moderate a panel at the same conference at 1:00.
As I’ve always said, I’m not an economist, but I don’t know why the subject of lowering rates keeps coming up while grocery prices—and just about everything else—continue to go up. It was a stupid gamble when the Fed lowered rates in December, and I still think it’s licking its wounds.
I don’t think it’s a good idea to threaten Powell with his job or try to pressure him into lowering rates before it’s economically feasible. If Trump had it his way, he’d lower them today. There will be no rate reduction during the July 29–30 two-day Fed meeting.
Rate Cut Forecasts:
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Goldman Sachs: Recently raised its forecast to three rate cuts in 2025, citing muted tariff effects and labor market weakness.
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Morgan Stanley: Maintains the view that the Fed will stay on hold for the rest of the year, with cuts coming in 2026.
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JPMorgan: Anticipates a potential pause in rate cuts for the rest of 2025, with the possibility of a cut in September.
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Deloitte: Expects a 50 basis point cut in Q4 of 2025.
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Morningstar: Predicts a 0.50 percentage point cut in 2025, followed by more in 2026 and 2027.
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U.S. Bank: Says investors expect two rate cuts in 2025, with estimates fluctuating due to tariff uncertainty.
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Bloomberg Economics: Expects just one rate cut this year, likely in Q4.
Switch
The S&P Dow Jones Indices announced on Friday, July 18, 2025, that Block Inc. ($XYZ) would replace Hess Corp. ($HES) in the S&P 500 index before the opening of trading on Wednesday, July 23, 2025. This decision followed Chevron’s acquisition of Hess, which concluded on July 18.
Block’s inclusion is seen as a reflection of its robust business and key role in the financial technology sector. Analysts like David Koning from Baird acknowledged Block’s strength, reiterating an “Outperform” rating and raising the price target to $84.
New Craz: $OPEN $AMPX
Not sure who saw this, but there’s a new class of trading where young people are piling into no-name stocks.
One such company, Shares of Opendoor Technologies ($OPEN), jumped 30% in pre-market trading Monday as it became the latest target in the meme stock frenzy, trading 1.9 billion shares. From Tuesday, July 15, to Friday’s close, $OPEN skyrocketed over 188%. The company has caught the attention of retail traders, leading to a massive spike in volume over the past few days.
PitBull said that over his career, this kind of behavior has always been a sign of greed—and that there’s an accident coming.
From Jeff Hirsch Stock Trader’s Almanac
Low Volatility Streaks Have Preceded Tepid S&P 500 Performance
As of today’s close, S&P 500 has gone 18 trading days without a daily move exceeding +/-1% which would seem like a significant feat, especially this year. However, S&P 500 has matched or exceeded its current low volatility streak 175 previous times since 1950. The longest streak was an amazing 167 days from the end of February to late October in 1963.
On average, the S&P 500 did not fare well immediately after past low volatility streaks ended recording losses of 0.36% and 0.25% 1- and 2-weeks after (bright green “All” line in chart above). By 1 month later S&P 500 had generally turned the corner and began its upwards march once again with average performance returning to +0.21%. On average performance remained positive 3, 6, and 12 months later.
Our Lean
There are no economic releases today, but three Fed speakers, including Jerome Powell at 8:30, and 112 names in the S&P are reporting earnings. According to FactSet, of the S&P 500 companies that had reported as of Friday, 83% posted higher-than-expected earnings per share.
Several people I know think the S&P is a train wreck about to crash, and to them I go back to an old saying: I’m not here to fight city hall. If the S&P is going up, I want to go for the ride.
Our lean: Every time the ES quickly drops 20 or 30 points, people start thinking the high is in and it’s watch-out-below time. But right now, it doesn’t matter if it’s a 30-point drop, a 50-point drop, or a 100-point drop—it’s going to get bought.
Ideally, what the ES needs is another pullback and a few days of back-and-filling to continue its push toward ES 6500. I think the trend of buying pullbacks is where the money train is.
Does that mean you can’t sell a gap-up open? No—but yesterday was a good example of why I didn’t: it turned into a gap-and-go. 6280–6300 are key support areas. If the ES starts breaking through those levels, we could see a move back down to 6250, then 6220, but I don’t think that’s very likely.
MiM and Daily Recap
ES Futures Market Recap – July 21, 2025
The overnight Globex session on Sunday evening into Monday saw a decent upward bias after an early evening rally. The ES opened at 6335.75 and quickly climbed to a swing high of 6345.00 at 21:00 before retreating to a higher low at 6388.75 by 23:50. After holding support, prices pressed higher, culminating in a pre-dawn high of 6354.50 at 04:00 am. From there, a sequence of lower highs and lower lows unfolded: 6354.00 at 06:10, 6350.00 at 08:30, and ultimately a Globex low of 6339.75 at 09:00. The market rebounded modestly to finish the session at 6348.50, up 12.75 handles (+0.20%) from the Globex open.
The regular session opened at 6348.75 and bulls ran the prices up to a high of 6372.250 by 10:30—a 32.75-point surge (+0.52%) from the opening. A shallow pullback to 6364.75 at 10:51 was followed by another thrust to 6374.00 at 11:33, printing a marginal new high.
However, bullish momentum began to wane in the afternoon. The market rolled over into a lower low at 6363.50 by 12:24. An afternoon bounce retraced part of the drop, reaching 6373.75 at 13:33, but once again faded into a lower high at 6370.75 by 14:21. The afternoon was marked by steady selling pressure that accelerated into the close, culminating in a late-day low of 6341.00 at 15:57. The session settled at 6345.25, down 3.50 handles (-0.06%) from the open but still 10.50 points above the prior cash close (+0.17%).
Market Tone & Notable Factors:
The tone throughout Monday was mixed, with early strength giving way to late-session weakness. The regular session’s intraday structure transitioned from bullish to distributive as the day wore on, with a series of lower highs and lower lows developing after the midday peak.
Total volume for the full session reached 892,768 contracts, slightly below recent averages, but fairly typical for mid-summer trade. Most of the day’s participation occurred during the regular session, which logged 731,626 contracts.
Market-on-Close (MOC) data showed a strong sell imbalance of -$1.379B and was reflected in the final 30 minutes of trading, which saw the ES drop nearly 30 points into the closing low.
Overall, the session left behind a neutral-to-bearish undertone heading into Tuesday, with failure to hold gains and a pronounced end-of-day liquidation suggesting continued caution may be warranted in the short term.
Technical Edge
Fair Values for July 22, 2025:
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SP: 36.74
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NQ: 155.8
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Dow: 202.1
Daily Market Recap 📊
For Monday, July 21, 2025
• NYSE Breadth: 46% Upside Volume
• Nasdaq Breadth: 65% Upside Volume
• Total Breadth: 63% Upside Volume
• NYSE Advance/Decline: 48% Advance
• Nasdaq Advance/Decline: 55% Advance
• Total Advance/Decline: 52% Advance
• NYSE New Highs/New Lows: 95 / 36
• Nasdaq New Highs/New Lows: 296 / 68
• NYSE TRIN: 1.06
• Nasdaq TRIN: 0.64
Weekly Breadth Data 📈
For Week Ending Friday, July 18, 2025
• NYSE Breadth: 53% Upside Volume
• Nasdaq Breadth: 64% Upside Volume
• Total Breadth: 60% Upside Volume
• NYSE Advance/Decline: 42% Advance
• Nasdaq Advance/Decline: 54% Advance
• Total Advance/Decline: 49% Advance
• NYSE New Highs/New Lows: 207 / 76
• Nasdaq New Highs/New Lows: 473 / 177
• NYSE TRIN: 0.62
• Nasdaq TRIN: 0.64
ES – Levels
The bull/bear line for the ES is at 6347.50. This is the key pivot level for today. Holding above it would indicate bullish continuation, while failure to hold opens the door for downside retracement.
Currently, ES is trading around 6341.75, just below the bull/bear line. If it stays under this level, the lower intraday range target of 6313 becomes the first downside objective. A break of that opens the path toward 6280.50. These are the critical supports to monitor intraday.
On the upside, if ES reclaims 6347.50 and finds acceptance, bulls can push toward the first resistance at 6374, with the upper range target for today at 6382. Sustained strength through that level would indicate continuation of the broader trend and a push toward 6414.
NQ – Levels
The bull/bear line for the NQ is at 23,331.00. This is the key level to watch today. As long as price remains below this line, sellers are in control and downside momentum could persist. Currently, NQ is trading at 23,307.75, confirming a bearish tone in the pre-market.
Downside targets include 23,178.00, which is today’s lower intraday range target. A break below this level could push price toward additional support at 23,034.00. Below that, a move toward 22,900.00 cannot be ruled out if selling accelerates.
On the upside, bulls need to reclaim 23,331.00 to have any chance of regaining control. If that happens, watch for resistance at 23,484.00, the upper intraday range target. A move above that opens the door for a test of 23,627.75, the next major resistance level. Holding above 23,484.00 would strengthen the bullish case.
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Calendars
Economic Calendar
Today
Important Upcoming
Earnings
Trading Room Summaries
Polaris Trading Group Summary – Monday, July 21, 2025
Positive Trade Highlights
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Overnight price action reached the 6345–6350 upper target zone from the Daily Trade Strategy.
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Strong bullish start with an early long lean off the Open Range (6345–6350).
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@NQ Open Range Long:
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Target 1 and Target 2 fulfilled by 10:07 AM.
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@ES Open Range Long:
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All targets fulfilled by 10:17 AM.
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Money Box zone at 6366–6370 was achieved during the morning rally.
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Cycle Day 2 Upper Penetration Target at 6372 was fulfilled late morning.
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Market followed a slow, steady grind upward through the AM session, confirming the bullish read.
Lessons and Insights
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Morning sessions continue to be the highest probability trading window. David emphasized the importance of trading early and avoiding lower quality afternoon setups.
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Afternoon reversal began with a 3 PM selldown during the bond close, aligning with a $1.8B MOC sell imbalance.
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Price consolidation and POC shift near highs during midday hinted at seller absorption and setup for reversal.
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David reiterated the importance of structure by identifying the “Line in the Sand” at 6335 and defining the sandbox range (6362–6372) later in the session.
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The “SOAP” analogy was used to illustrate the afternoon bull slip and shift in sentiment.
Community Engagement and Learning
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Several members checked in and shared feedback throughout the day.
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New member PeterN got support with Sierra Chart setup and was advised to trade in SIM while learning.
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Veteran members reinforced the value of PTG training videos and staying patient with the learning curve.
Takeaway
The day rewarded those who followed the structured plan and executed during the morning move. Clean technical levels, defined trade zones, and a disciplined approach led to strong trade fulfillment. The afternoon reversal highlighted the importance of protecting profits and understanding session dynamics.
Discovery Trading Group Room Preview – Tuesday, July 22, 2025
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Trade War Watch: A potential US-EU trade war is escalating. The EU seeks a pact but warns of retaliation if talks fail, with one German official declaring, “If they want war, they will get war.” President Trump is pushing for tariffs up to 30%, while Treasury Secretary Bessent stresses quality over speed in negotiations. Retailers face holiday uncertainty, bracing for supply disruptions in toys and artificial trees.
Legal & Policy Moves: Johanna Foods is suing over a new 50% tariff on Brazilian orange juice, arguing the measure unjustly raises consumer prices and overreaches executive authority. Meanwhile, the GENIUS Act—America’s first major crypto regulation—is now law, focusing on stablecoins to encourage digital dollar adoption.
Earnings: Premarket results due from CocaCola (KO), GM, Lockheed Martin (LMT), and Phillip Morris (PM), among others. After the bell, watch for Texas Instruments (TXN), Capital One (COF), and SAP.
Data & Fed: Light economic calendar today, with Richmond Fed at 10:00am ET. Fed Chair Powell speaks at 8:30am ET.
Market Action: ES continues to hover near all-time highs with volatility easing (5-day ADR: 54.75). Whale sentiment leans bearish into the open. Key levels to watch: Resistance at 6411/14 and 6491/94; Support at 6162/67, 6114/19, and 5682/87. Bulls eye a break of the psychological 6400 level.
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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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