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Our View

Global Markets

Nikkei 225: +3.51%
Japan’s Nikkei 225 jumped to its highest close in around a year.
CAC 40: +1.06%
DAX: +0.83%
FTSE 100: +0.42%
European and other Asian indexes posted gains, with the FTSE 100 notching a record high.

ESU25 (S&P 500 September Futures)

I think what we are seeing can be described in two words: irrational exuberance.

We can see how the bullish seasonals are playing out. The VIX sits at 16.40. The ‘fear and greed’ index is showing a high level of greed. And 83% of companies in the S&P have reported above analyst estimates, which is above the 5-year average of 78% and the 10-year average of 75%. Yet the data—particularly the inflation gauges—continues to paint a different picture.

Yesterday, the ES reached its 12th record close of the year, and the NQ has now made 14 new highs year-to-date as of July 23. It has also gone 62 days without crossing below its 20-day moving average, which marks the second-longest streak on record, after a 77-day run in 1999.

When looking at the seasonal trends, August’s net changes over the last 10 years are mixed: 2 unchanged, 4 up, and 4 down. It was up 2.35% in 2024, but down 1.7% in 2023 and down 4.2% in 2022. Total net gains over the 10-year period are +15.4%, while total losses are -13.9%, which makes it a slightly positive month overall.

September tells a different story. It’s been down in 7 of the last 10 years, with some large drops: down 4.9% in 2023, down 9.3% in 2022, down 4.8% in 2021, and down 3.9% in 2020. It was up 2.0% in 2024 and 1.9% in 2019. Most other Septembers flatlined, except for 2015 when the S&P fell 2.6%. When you total it up, the gains are +6% and the losses -25.6%, an average loss of 19.6%.

October has been split—5 up and 5 down—over the last decade. Notable moves include: down 0.91% in 2024, down 2.10% in 2023, up 8.10% in 2022, up 7.01% in 2021, down 2.77% in 2020, up 2.04% in 2019, down -6.48% in 2018, up 2.33% in 2017, down 1.94% in 2016, and up 8.44% in 2015. In total, October’s gains come to +27.92% and losses -14.56%, giving us a positive net of 13.36%, which supports the old trading adage that October is the bear killer.

If the S&P makes a high in July, I think the next two months could see some selling. August tends to post minimal gains, while September clearly leans bearish. Combined, August and September have had a total gain of +21.4% and a total loss of 39.5%, for a net of -18.1%.

Don’t get me wrong, I’m still a bull. But remember that when the bull market started in 2023, we did see a selloff of 5% or more. According to the Stock Trader’s Almanac, the week after July expiration is prone to wild swings. The last trading day of July has seen the Nasdaq and S&P down 12 of the last 19 years, and the Dow down 13 of the last 19.

The first trading day of August has the Dow down 18 of the last 27, with the first 9 days of August tending to be weak. Historically, August is the second-worst month for both the Dow and S&P from 1988 to 2023.

In the end, the ES and NQ both made new all-time highs. In terms of tone, they were firm on Tuesday’s close and stayed firm all day Wednesday. Volume on the ES was steady at 1.1 million contracts traded.

As I said in yesterday’s OP: the number one rule in trading is the simplest one—the trend is your friend. Don’t forget it.

But as we approach weaker seasonality, I think we could see a pullback soon.

Today’s economic calendar includes Initial Jobless Claims at 8:30, S&P PMI at 9:45, and New Home Sales at 10:00. On the earnings front we have BX,UNP and HON. The notional value of Friday’s options expiration is $3.4 trillion. All I can say is: welcome to the DOG DAYS OF SUMMER—and to tech earnings season.

Our lean: The ES and NQ are overdue for a pullback, but they’re showing no signs of retreating yet. I expect a two-way trade early in the day and will look for the PitBull’s Thursday low ahead of Friday’s expiration.

Levels I’m watching:

From Jeff Hirsch of the Stock Trader’s Almanac (@AlmanacTrader):

How Low Volatility Streaks End Matter!

Of 175 past S&P 500 low volatility streaks (closing with less than +/- 1%) since 1950, 108 ended with the S&P 500 declining 1% or more. This is 61.7% of the total and explains why, on average, all streaks tended to be followed by S&P 500 weakness. However, when the 175 past streaks are separated by how they ended, the difference in S&P 500 performance is eye-popping. Streaks that ended with a gain were bullish while those that ended with a loss were generally bearish.

MiM and Daily Recap

Intraday Recap:

The overnight Globex session saw a modest upward grind off early weakness. Price initially pulled back to 6342.75 at 18:45, marking the session low, before rallying sharply into 19:45 where it peaked at 6364.25. A pullback to 6349.00 at 21:00 was followed by steady accumulation through the early morning hours. The ES climbed to 6367.50 at 03:15, retreated briefly to 6360.50 at 03:45, and then extended again to 6374.25 by 06:15. A final dip to 6363.00 at 07:00 preceded the Globex high of 6376.75 at 09:15, setting the tone for the cash open.

The regular session began at 6372.75 and dropped to a morning low of 6335.50 by 10:00, completing a 19-point decline from the open. A strong rebound followed, lifting the ES to 6366.00 at 11:00 and then pulling back modestly to 6359.50 by 11:18. Buyers returned in force, sparking a vertical rally to 6385.00 at 11:54 based on tariff news. A mild retracement to 6371.50 at 13:15 was met with dip-buying strength that pushed price up to 6393.75 at 14:24.

From there, price eased to 6385.00 at 15:06 before launching higher once more in the final hour. The ES rallied 21.25 points into the regular session close, printing 6399 at 16:00,

Volume was heaviest during the cash session, with 927,024 contracts traded versus 154,510 during Globex. The full session logged 1,149,955 contracts.

On the full day, the ES gained 59.25 points (+0.93%) from the open and 53.50 from the previous day’s cash close. The regular session alone advanced 53.50 points (+0.84%) from the previous cash close, with both the Globex and cash segments contributing equally (+26.25 each).

Market Tone & Notable Factors:

The tone was bullish throughout, with an initial dip quickly reversed and strength building into the close. The rally was steady and stair-stepped, suggesting broad participation and strong intraday demand. Price showed resilience through midday pullbacks and ultimately pushed through prior resistance into fresh closing highs.

Market-on-Close (MOC) data revealed a strong bearish imbalance, with -$1.022B to sell and a -71.1% symbol skew favoring the sell side in the NASDAQ. Despite this, the ES held firm into settlement, suggesting the imbalance was either anticipated or absorbed without derailing the upward move.

Overall, the day concluded on a bullish note, with ES closing at session highs and continuing the broader trend higher. The price action reflects continued upward momentum despite late-session selling pressure, hinting at sustained buying interest heading into the next session.

How to read the MiM

Guest Posts:

Dan @ GTC Traders

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Technical Edge

Fair Values for July 24, 2025

Daily Breadth Data 📊

For Wednesday, July 23, 2025

• NYSE Breadth: 74% Upside Volume
• Nasdaq Breadth: 65% Upside Volume
• Total Breadth: 66% Upside Volume
• NYSE Advance/Decline: 68% Advance
• Nasdaq Advance/Decline: 69% Advance
• Total Advance/Decline: 68% Advance
• NYSE New Highs/New Lows: 146 / 15
• Nasdaq New Highs/New Lows: 303 / 32
• NYSE TRIN: 0.70
• Nasdaq TRIN: 1.18

Weekly Breadth Data 📈

For the 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

Calendars

Economic Calendar Today

This Week’s High Importance

Earnings:

Released

Full Calendars

Trading Room News:

Polaris Trading Group Summary: Wednesday, July 23, 2025

Overview:
A classic Cycle Day 1 unfolded with bullish control from the overnight session through the close. Despite a slow, low-volume start, price action confirmed key levels, leading to a trend-up day that fulfilled multiple upside targets and ultimately broke out to new all-time highs above 6400.

Positive Trade Highlights:

Lessons and Takeaways:

Closing Notes:

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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!