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- Bond Market’s Getting Whacked, Crude’s on Fire, and the ES Better Keep Its Helmet On
Bond Market’s Getting Whacked, Crude’s on Fire, and the ES Better Keep Its Helmet On
Danny Riley
May 18, 2026
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When you see all these big IPOs at a time when the market is overheated and the bond market is crashing, it should send shivers up your spine.
It’s not just the US interest rates that are under attack; sharp selloffs in Japanese and U.K. government bonds spilled over into the U.S. and other markets on Friday. As the Iran conflict drags on, the “big rotation” has been out of precious metals and into energy/oil bets that many believe will stay higher for longer.
So far, the only thing out of the Trump/Xi meeting is that China wants a negotiated end to the war. But while China wants the war over, they are completely resisting Washington’s efforts to make them the enforcement arm of the White House and are still shielding Iran diplomatically at the UN. They are currently pushing back against a U.S.-Bahraini resolution on Hormuz because China fears a resolution that opens the door to a UN “use of force” clause.
China has also reaped valuable US military information on what worked during the war and what didn’t. The conflict has provided an invaluable, real-time masterclass in contemporary, multi-domain warfare. Rather than looking at who is “winning” on a purely tactical level, Chinese military planners are studying the deep structural strengths and glaring operational weaknesses the U.S. military has exposed during the fighting.
Donald Trump broke his post-summit silence on Sunday with an incredibly blunt, high-stakes warning directly targeting Tehran on Truth Social. The post came just hours after details of a deep diplomatic stalemate leaked, followed by a lengthy phone call between Trump and Israeli Prime Minister Benjamin Netanyahu.
The DXY, or dollar index, has been up 14 of the last 19 sessions, up 1.18 points, or +1.20%. Over the same time frame, the 30-year T-bonds, ZBM29, have been down 12 of the last 19 sessions for a total loss of 4.01 points, or -3.52%.
Why is that happening? Higher rates and inflation expectations crush old, low-yielding bonds. Investors dump them for better returns elsewhere, driving bond prices down and yields up. At the same time, soaring U.S. yields act like a global capital magnet. Foreign investors have to buy greenbacks to invest in U.S. assets, driving the dollar up.
The bottom line is that high interest rates are a heavy weight on fixed-income bond prices, but a massive anchor pulling global cash right into the dollar.
I pulled a few charts, and the first one is a 5-year 30-year bond futures vs. the DXY, which shows the bonds are down to where they were at this time last year on 05/19/25, literally 1 year ago. Like I have said, I’m not a chartist, but Rich from @HandelStats said last year that if the bonds broke 110.00, they could fall to 107.00 or down to the old lows around the 106.17 level. I have to be honest, if something like that happened, inflation would be 6% or 7%.
DXY vs 30-Year Bond 3-Month Comparison Chart
The other part of this is the continued rotation out of gold into crude oil. As I write this at 9:20 PM Sunday night, gold is down 1.4%, down to $4,500, and the CLM26 crude futures are up 2.48% at $107.90. Below is the comparison chart for that also.
I hate to keep saying I don’t know, but I don’t, and nor do I think anyone else does. What I can say is that things feel very unstable. If Trump does start attacking Iran again, I think crude oil will have a clear shot at $120 or higher, and that will not be good for the ES and NQ, especially if the bonds are getting whacked.
The ES just traded down to 7381.50, down 0.70%, and the NQ is at 28,961, down 0.93%. Bitcoin is back down to 76,813, down 1.4%.
Do we have a tech wreck on our hands? I think we all know that the markets had gone up too much too fast without a pullback, and now we are seeing it; we all know nothing goes up forever.
I don’t want to say “stand down,” but now may be a better time to protect than add. I tend to like trading the ES and NQ under these conditions because if you trade them right, you can get paid large sums quickly.
Our lean: When I look at the ES chart, it looks like 7300, 7250, 7200 could come fast. I think as long as oil is going up and the bonds are weak, you have to sell the rips. If oil sells off and the bonds bounce, you could see a rip, but as I said, everything feels very unstable.
Market Profile Commentary
The ES profile remains rotational around the 7,432.25 POC, confirming it as the dominant equilibrium level. Current value is tightly compressed between 7,417 VAL and 7,435 VAH, signaling balance conditions ahead of a likely expansion move.
Acceptance above value shifts the auction into bullish price discovery, targeting 7,450 → 7,477 → 7,525. Failure below 7,417 opens a lower-volume auction zone where price could rapidly traverse toward 7,375, then potentially 7,342 and the larger composite support shelf near 7,310.
But the volume of trading — more than 40 per day over a three-month period — stands out as much as the potential dollar value.
“This is an insane amount of trades,” said Matthew Tuttle, chief executive officer of Tuttle Capital Management.
Full Article: https://finance.yahoo.com/markets/stocks/articles/trump-traded-nvidia-boeing-intel-030913697.html
The ES traded in a 7528.25 to 7436.00 Globex trading range and opened Friday’s regular session at 7459.50, down 66.50 points, or -0.65%.
After the open, the ES rallied up to 7462.00 and then quickly dropped 41.75 points down to 7420.25 at 9:45. It rallied 30.75 points up to 7451.00 at 9:55, then sold off down to 7429.00. The ES rallied 38.75 points up to 7467.75 at 10:20, traded down to a higher low at 7448.75 at 10:25, and then rallied up to a lower high at 7463.75. From there, it sold off to a higher low at 7442.00 at 11:05.
The ES rallied up to 7460.00 at 11:30 and then dropped 28.25 points down to another higher low at 7431.75 at 11:55 and then rallied 44.00 points up to 7475.75 at 2:05. After the high, it sold off down to 7445.25 at 2:30, rallied up to 7459.75 at 2:55, and then sold off to 7441.00 at 3:15.
The ES chopped around in a narrow back-and-fill, traded up to 7449.50 at 3:40, and then sold off down to 7439.25. It traded 7444.00 as the 3:50 cash imbalance showed $3.5 billion to sell, then sold off down to 7427.00 and traded 7432.50 on the 4:00 cash close.
After 4:00, the ES sold off down to new daily lows at 7409.25 at 4:10, trading at a big discount to the S&P cash, and then rallied up to 7422.50 at 4:14. The volume tapered off and the ES settled at 7432.25, down 93.25 points, or -1.24%, the largest down move in 28 trading days.
The NQ settled at 29,231.75, down 456 points, or -1.54%, the largest down move in 16 trading days. The YM settled at 49,617, down 537 points, or -1.07%, and the RTY got hit the hardest and settled at 2,799.60, down 69.80 points, or -1.48%, or down the most in 28 trading days.
In the end, the index markets took a beating as rising yields finally weighed on the ES and NQ, and the CME Fed Funds showed a 54% chance of a December rate hike that I think could come sooner. In terms of the ES and NQ’s overall tone, there were some decent pops, but all the rips led to new lows, and the after-4:00 fall was UGLY. In terms of the ES’s overall trade, volume was on the higher side at 1.83 million, but low for the size of the move.
I admit the “lean” was off, and I could have changed it before the OP went out, but the writing was on the wall Thursday night after the ES reversed on Globex and the Asian and European markets fell. My 1999–2000 tech bubble call was timely also.
Mounting global inflation pressures have pushed yields higher around the world, with the US 10-year note yield rising to 4.6% on Friday, its highest level in more than a year. The yield spike helped pause the stock rally that pushed the ES and NQ to new record highs.
This Week’s Major U.S. Economic Reports, Fed Speakers, and Earnings
This week, there are only 8 economic reports, the Fed minutes, 3 Fed speakers, and some big-name earnings:
Upcoming Retail Earnings
Tue 5/26: Walmart (WMT), Target (TGT) — Pre-Market
Thu 5/28: Costco (COST) — After Close
Key Catalysts
Wed: FOMC Minutes + NVDA earnings
Thu: Heavy macro data cluster
Retail: HD, LOW, TJX, ROST, WMT, TGT, COST
AI/Semis: NVDA, PANW, ADI
Goldman Sachs
Market history suggests that US equities will make more record highs in the months ahead, says Brian Garrett, head of equity execution on the Cross Asset Sales desk in Global Banking & Markets.
After a massive rebound in the past six weeks—which saw the S&P 500 recoup all of its March losses and then some—a key question is whether US stocks are likely to cool off.
Garrett says these concerns are reasonable. He points out that “investor sentiment has gone from quite negative to extremely positive” in a short length of time—which could suggest that there is now a lack of potential buyers.
Indeed, after the S&P 500 makes new all-time highs, returns over the next month do tend to be below average.
Manny - @manny_trends
If this bigger picture is the map, my daily setups are the execution plan. I post them each morning on my X feed, @manny_trends, where I share the levels and structure I am watching for the day ahead.
Manny Payano
@manny_trends
The MOC opened with a broad sell imbalance and stayed heavy through the early part of the print before sharply narrowing into the final minutes. At 15:50, all markets showed -$1.94B, driven by $2.03B to sell against only $90M to buy, a very wholesale-style -95.8% dollar lean. The imbalance deepened to -$5.64B by 15:55, with sell pressure near $9.0B, before the tape transitioned into a more rotational close. By 15:59, the imbalance had narrowed to just -$126M, flipped briefly positive at 16:00 to +$293M, and finished at 16:01 back to -$276M.
The headline summary showed All Markets at -$3.08B near 15:51, with a -65.5% dollar lean and -51.8% symbol lean. That was close to wholesale selling on dollars, but symbol participation was more rotational. The split underneath was important: NYSE was actually buy-side, showing +$656.85M with +55.9% dollar lean, while the S&P 500 was -$3.00B at -66.4%, right on the notable wholesale sell threshold. Nasdaq was the clear pressure point, showing -$3.74B with a very aggressive -92.2% dollar lean and -77.3% symbol lean.
Sector-wise, Information Technology carried the largest sell imbalance at -$2.704B with a -93.4% dollar lean, making it the dominant wholesale sell sector. Communication Services was also notable at -$425M and -74.5%, while Utilities showed -$180.66M at -76.4%. Consumer Discretionary was right on the edge of notable selling at -66.6%. On the buy side, Energy showed +$143.21M at +68.8%, Financials were +$336.71M at +67.0%, and Basic Materials was a clean +100% buy, though on only one symbol.
Single-name action showed heavy dollar-paired buying in mega-cap tech, including MU, MSFT, GOOGL, AMD, AAPL, INTC, NVDA, and AVGO, while the top buy imbalances were led by UNH, TJX, CAT, BAC, TMUS, CRM, CVX, SHW, VLO, and C. Overall, this was a tech- and Nasdaq-led sell close that transitioned from wholesale selling toward a more balanced final print.
Technical Edge
Fair Values for May 18, 2026
SP: 19.33
NQ: 90.56
Dow: 67.82
Daily Breadth Data 📊
For Friday, May 15, 2026
• NYSE Breadth: 28% Upside Volume
• Nasdaq Breadth: 34% Upside Volume
• Total Breadth: 32% Upside Volume
• NYSE Advance/Decline: 23% Advance
• Nasdaq Advance/Decline: 24% Advance
• Total Advance/Decline: 24% Advance
• NYSE New Highs/New Lows: 54 / 106
• Nasdaq New Highs/New Lows: 100 / 213
• NYSE TRIN: 0.75
• Nasdaq TRIN: 0.62
Weekly Breadth Data 📈
For Week Ending May 15, 2026
• NYSE Breadth: 43% Upside Volume
• Nasdaq Breadth: 51% Upside Volume
• Total Breadth: 48% Upside Volume
• NYSE Advance/Decline: 26% Advance
• Nasdaq Advance/Decline: 31% Advance
• Total Advance/Decline: 30% Advance
• NYSE New Highs/New Lows: 285 / 214
• Nasdaq New Highs/New Lows: 745 / 521
• NYSE TRIN: 0.47
• Nasdaq TRIN: 0.45
BTS Levels - (Premium Only)
Polaris Trading Group Summary - Friday, May 15, 2026
Friday’s PTG session was framed from the start as FRYday / Capital Preservation Day, with David emphasizing discipline, selective execution, and protecting the week’s gains while still recognizing the high-quality setups that developed.
Pre-Market Framework
David opened with the daily links and strategy resources.
ES had already fulfilled its Cycle Day 1 downside average decline at 7446.75.
The early focus was on respecting the completed downside objective and avoiding overtrading after a strong overnight move.
Positive Overnight Trade
David noted that the overnight flag shorts “ran away with big profits.”
This was the strongest positive trade theme of the day.
Lesson: when structure, cycle expectations, and price action align, traders should allow the setup room to work instead of exiting too quickly.
Key Levels and Risk Zones
David identified the Gamma and Cycle Violation Zone between 7426–7423.
That area served as an important downside reference.
The room also tracked the prior low near 7471, which later became a major upside reclaim target.
Capital Preservation Mindset
David reminded the room that Friday is Capital Preservation Day.
The tone was cautious but not passive: trade the best setups, avoid marginal ones, and protect prior gains.
This was especially important after the overnight shorts had already produced strong opportunity.
Market Development
Around mid-morning, David described the market as establishing two-way trade.
This suggested a balanced, back-and-forth environment rather than a clean trend.
Traders were encouraged to read the auction carefully instead of assuming continuation.
Bias Shift
Later in the morning, David stated that the long bias had shifted.
He called out BTFD, with the goal of reclaiming the prior low near 7471.
This marked the key intraday transition from balanced trade to a more constructive long-side posture.
Afternoon Push
David checked back in for the final push and noted that bulls were trying to clear and close above the prior low / 7471 area.
This kept the afternoon plan tied directly to the earlier bias shift.
The prior low remained the main measuring stick for whether bulls could regain control.
Lessons Learned
Respect cycle targets once they are fulfilled.
Fridays require extra discipline and a capital-preservation mindset.
Let the market reveal whether it is trending or rotating before pressing trades.
Strong levels like the violation zone and prior low provide structure for better decisions.
The best trades came from preparation and patience, not chasing.
DTG Room Preview – Monday, May 18, 2026
Geopolitics: US/Iran conflict remains the key market driver, weighing on stocks and bonds while pushing oil and gasoline prices higher.
Energy: A deal to reopen the Strait of Hormuz remains elusive, keeping pressure on oil and raising concerns that US gasoline prices could move sharply higher.
Negotiations: US/Iran talks remain tense, with the US waiting on an updated Iranian proposal while Iran says Washington is offering few meaningful concessions.
Ceasefire: The ceasefire remains fragile, with Israel prepared to resume strikes and additional drone activity highlighting ongoing regional risk.
Bonds: Global bonds are selling off, with long-end yields rising across the US, Japan, Australia, and New Zealand. Markets are now pricing a Fed hike in March 2027.
Gold: Central bank demand continues to support gold, though Goldman cautions it could be sold for liquidity if equities weaken further.
Volatility: Volatility remains elevated, with the ES 5-day average daily range rising to 83.75 points.
Whales: Whale bias leans bullish into the US open on elevated overnight large trader volume.
ES Levels: Key resistance is 7415/18. A reclaim could open the door toward 7608/13, while failure to clear keeps downside risk toward 7267/72 and 7120/25.
Trend: Longer-term ES structure remains bullish, with the 50-day MA still above the 200-day MA.
