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Buying the Dips—Until Nobody Wants Our Bonds
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Yes, the ES and NQ rallied again, but there was something foreboding in the background that is pretty hard to overlook, and it's a precursor to higher inflation. What is it? The yields on the 30-year bonds and 10-year notes.
My cousin Bobby Riley, who I have always respected as a very smart guy and a good trader, said, “Just keep buying the dips until no one wants our bonds anymore.”
Why is it crucial? The benchmarks for 10-year and 30-year Treasuries holding above critical thresholds highlight growing fears over mounting debt and stubborn inflation—fueled by the renewed US attacks on Iran reaching its 11th day and threatening oil flow through the Strait of Hormuz.
While tech excitement initially helped investors look past rising energy costs, Brent crude testing $93 per barrel is forcing a market reality check. Unrelenting energy prices threaten to drive up borrowing costs and derail progress toward the central bank's target, leading strategists like Yardeni Research to maintain that Fed rate hikes remain a distinct possibility this year.
I could pull up the yield charts, but it's pretty easy to see that the (ZNU26) is under attack: ZNU26 Price History
And so is the (ZBU26), which has been down 13 of the last 16 sessions:
Below is a chart of the bonds and the $TNX yield chart. Call it what you like, but I call it scary!
3-Month (ZBU26) Bond Chart vs. the $TNX 30-Year Yield Chart
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Dan @ GTC Traders
A Look at Interest Rates, Yields and FOMC
At the time of this writing, interest Rates are rising.
Yes …
Again.
We have 6 days until the next FOMC meeting, and then subsequent announcement on the Federal Reserve Target Range and press conference. And it seems that at least at the moment, interest rates are front running the possibility of a rate hike. Probabilities of a hike through the lens of a CME Quantitative view have risen in recent days to look a little something like this at the moment ...
If the above image does not translate to well to this document? That is a 35.8% chance of a 25 BPS rate hike. That has risen from Sunday, when there was only a 14.4% chance of a rate hike.
It would be easy for us to take a ‘victory lap’ here, but for the sake of mental clarity we’ll try to avoid that. Anyone who knows our macro-regime stance of the last 5 years, will know that we have consistently felt that interest rates have been too low. Put simply … Interest rates need to rise. Because the Federal Reserve has not shown any serious interest in battling inflation, beyond mere lip service.
Until now.
The market is starting to pay attention to hawkish statements by the Federal Reserve, and this has sent yields rising.
Looking to the thirty day pegged SOFR Yields, in October of 2026 … or the SR1V2026 contract, we find the market at 96.09 at the time of this writing, or 3.91% yields (100-96.09 =3.91) ...
If we move out to ninety day interest rate markets, and look at the SOFR yield curve? The following chart has ‘1’ as the first term, or SR3U2026. The 2, is the next quarterly term … SR3Z2026, and so on. So, 1 marks September of 2026. 2, marks December of 2026. 3, marks March of 2027, and so on ...
It is quite clear to see, that for more than a month, the entire yield curve has been rising. The 4th term or … ‘4th white’ of June 2027 is now printing over 4.20%. Well over 25 BPS of hikes, and seriously looking at a possibility of 50 BPS of hikes. We don’t mind saying that one of the partners at GTC Traders, does believe there is at least the possibility of a single, 50 BPS rate hike.
Simply … Be Aware
We personally do not trade FOMC news announcements. That’s simply ‘our way’. We’re sure some have a beautiful risk model for trading such events. We simply prefer to avoid the volatility.
However, sidestepping headline volatility is not the same as ignoring structural shifts in the financial landscape.
Interest rates act as the fundamental anchor for all global asset pricing. When yields re-price across the entire curve as aggressively as they are right now, it alters liquidity, collateral values, and baseline risk parameters across every corner of the market.
Staying acutely aware of these movements isn't about gambling on what the Federal Reserve will say next week. It is about respecting the broader climate. Being aware. You don't need to predict the exact weather forecast to drive, but you certainly need to know whether you are taking a sharp corner on dry pavement … or black ice. Your vehicle remains the same, but the terrain dictates your margin for error. In the same way … as we have long maintained and repeated … it is vitally important to understand the larger macro-environment in which any trader finds themselves so as to navigate risk effectively, protect capital, and avoid operating blindly when structural conditions change.
Until next time, stay safe, and trade well ......
After a big rally on Turnaround Tuesday, the ES traded in a 7535.75 to 7504.00 Globex trading range, with 185k contracts traded, and opened Wednesday's regular session at 7527.75, down 18 points or -0.24%.
After the open, the ES traded 7525.25, rallied 31.00 points up to 7556.25 at 10:00, sold off 27.50 points down to 7528.75 at 10:45, and then made four higher highs up to 7563.50 at 12:15. It made two small higher lows at 7562.75 and 7562.50, then sold off 19.50 points down to 7544.00 at 2:00, rallied 5.00 points up to 7549.00 at 2:50, and sold off down to 7540.75. At 3:22, total volume was 790k. If you take out the 185k from Globex, that was only 605k contracts traded so far during the day session. At 3:36, the ES traded down to 7536.25, traded up to 7544.50 at 3:49, and traded 7543.00 as the 3:50 cash imbalance showed $1.35 billion to sell. It traded 7538.50 at 3:57 and 7536.50 on the 4:00 cash close.
After 4:00, the ES rallied up to 7552.50 after GOOG and TSLA beat 2Q earnings estimates, then sold off down to 7531.75, rallied back up to 7554.00, sold off down to 7541.00 at 4:45, and settled at 7541.25, down 4.50 points or 0.06%.
The NQ settled at 29,181.25, down 134.75 points or -0.46%; the YM settled at 52,504.00, down 55.00 points or -0.10%; and the RTY settled at 2,988.10, down 8.90 points or -0.30% on the day.
In the end, I think a lot of the buying over the last two sessions was shorts covering or people who had hedged stock with short calls getting out.
In terms of the ES's overall tone, there was a nice rally, but I think the sell-off after 2:00 was the algos taking advantage of the low volume. In terms of the ES's overall trade, volume was really low at 975k contracts traded.
MiM
The MOC opened with a sizable $1.5 billion sell imbalance, driven by $2.2 billion to buy against $3.7 billion to sell. The dollar lean was -62.5%, while the symbol lean was -53.1%, with 323 stocks to buy and 366 to sell. That combination showed broad but initially rotational selling rather than a full-market liquidation.
Selling intensified quickly. The imbalance widened to $2.1 billion at 15:53 and reached its peak of $4.1 billion at 15:54. Dollar leans from 15:53 through 15:57 ranged between -67.5% and -70.0%, crossing the -66% threshold and signaling periods of wholesale institutional selling. Symbol leans remained near -55%, however, indicating that the pressure was concentrated in larger-cap names rather than evenly distributed across the market. The imbalance then moderated sharply, improving to $1.0 billion at 15:59 before finishing near flat at just $82 million to sell at 16:00.
Technology was the primary source of pressure, posting an $842.7 million sell imbalance and a notable -75.6% dollar lean. Financials followed with $351.1 million to sell and a -70.4% lean. Energy showed the strongest wholesale liquidation at -95.5%, while real estate registered -75.7%. Health care also crossed the notable threshold at -67.2%.
The largest individual sell imbalances included AMAT at $173.3 million, Visa at $147.9 million, AMD at $142.4 million, NVDA at $129.5 million and AAPL at $123.6 million. AVGO, BRK.B, LLY, MA, XOM and WDC also faced meaningful selling.
Buying was concentrated in consumer sectors. Consumer staples carried a notable +67.9% dollar lean, while consumer discretionary reached +68.2%. MSFT led individual buys at $195.8 million, followed by SPCX at $159.7 million, META at $104.8 million, PLTR at $72.4 million and GOOGL at $64.1 million.
Daily Breadth Data 📊
For Wednesday, July 22, 2026
NYSE Breadth: 52% Upside Volume
Nasdaq Breadth: 42% Upside Volume
Total Breadth: 46% Upside Volume
NYSE Advance/Decline: 44% Advance
Nasdaq Advance/Decline: 36% Advance
Total Advance/Decline: 38% Advance
NYSE New Highs/New Lows: 62 / 54
Nasdaq New Highs/New Lows: 95 / 184
NYSE TRIN: 0.72
Nasdaq TRIN: 0.76
Weekly Breadth Data 📈
For the Week Ending Friday, July 17, 2026
NYSE Breadth: 48% Upside Volume
Nasdaq Breadth: 44% Upside Volume
Total Breadth: 45% Upside Volume
NYSE Advance/Decline: 53% Advance
Nasdaq Advance/Decline: 39% Advance
Total Advance/Decline: 44% Advance
NYSE New Highs/New Lows: 296 / 119
Nasdaq New Highs/New Lows: 445 / 510
NYSE TRIN: 1.25
Nasdaq TRIN: 0.82
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Today’s Economic Calendar
PTG Room Summary – For Wednesday, July 22, 2026
Wednesday’s session followed the prior evening’s roadmap closely, with the overnight downside targets reached early. The room then focused on trade management, market structure, timing, order flow, and the recurring pattern of morning strength followed by afternoon weakness.
Overnight and Opening Outlook
Price drifted lower overnight and fulfilled the projected 7515 downside target from the Daily Trade Strategy.
The Cycle Day 1 average decline target at 7513.50 was also reached.
David noted that a normal Cycle Day 1 remained intact.
Additional downside targets included:
The prior session low near 7473
The key support zone between 7465 and 7475
Theme of the Day
David’s theme was: “If at first you don’t succeed…try, try again.”
He emphasized that confidence should come from evidence rather than emotion.
The process for building confidence included:
Backtesting
Journaling
Executing the same setups consistently
Reviewing results over time
Positive Trade Execution
Nicholas reported that the prior day’s guidance had worked very well.
He managed a successful long trade and exited his final contract near the previous close.
Although the trade had room to continue, the execution reflected:
Disciplined profit-taking
Good position management
Continued improvement and learning
Morning Market Structure
The room discussed how seller exhaustion can create buying opportunities.
Members focused on identifying the point when the final seller may have entered the market.
Previous buy-response levels were used as references for potential long setups.
The room also examined:
Accumulation and distribution
Rotations around round numbers
Iceberg and hidden orders
Wyckoff concepts
Buy-response structures
Trade Management Lessons
The room discussed whether stops should be moved to breakeven after a trade begins working.
Moving to breakeven can protect capital, but doing so too quickly may stop out a valid runner.
Trade management should be based on:
Market structure
The original trade plan
The location of nearby support and resistance
The behavior of price after entry
Traders were reminded not to manage positions purely from fear of losing unrealized profit.
A4 and A4/A10 Strategy Discussion
The room explored using the A4/A10 strategy to define the broader trade direction.
The A4 strategy could then be used to help manage or exit the position.
One example discussed was:
A4/A10 signals a long position
A4 later gives a sell signal
The sell signal is used to exit the long rather than open a hedge
This approach may help traders operating in prop accounts where hedging is restricted.
Timing and Trade Zones
David reposted the PTG Trade Time Zones document.
The room noted a meaningful directional shift around the 10:45 time zone.
This reinforced the importance of combining price structure with time-of-day tendencies.
Traders were encouraged to pay attention to recurring market behavior around established PTG time zones.
VWAP and Confirmation Tools
The room discussed the use of both standard and anchored VWAP.
Members also reviewed confirmation concepts involving:
A4 color changes
A10 signals
RSPR confirmation
Prior response levels
The broader lesson was to use indicators as confirmation rather than as isolated trade signals.
Afternoon Market Behavior
David noted that the market repeated a pattern seen over several recent sessions:
Strength during the morning
Selling pressure during the afternoon
He summarized the pattern as: “Pump ’em up during the morning session…smack ’em down in the afternoon session.”
Recognizing this recurring intraday rhythm was one of the most useful observations of the day.
Depth of Market Caution
Late in the session, David expressed frustration with the reliability of the displayed Depth of Market.
The lesson was not to rely too heavily on visible order-book liquidity.
DOM information should be confirmed with:
Actual price movement
Market structure
Executed volume
Response at key levels
End-of-Day Focus
Attention shifted toward TSLA and GOOGL earnings scheduled after the close.
Traders were reminded that major earnings events can affect broader market volatility and overnight positioning.
Key Takeaways
The overnight downside roadmap performed well.
Cycle Day 1 targets were reached as expected.
Seller exhaustion and prior response levels provided useful context for long setups.
Strong trade management is based on structure, not emotion.
Moving stops to breakeven too early can limit profitable runners.
The A4 and A4/A10 strategies can work together for direction and exit management.
PTG time zones remain valuable for identifying potential directional changes.
The pattern of morning strength and afternoon weakness continued.
Visible DOM liquidity should never be trusted without confirmation.
DTG Room Preview – For Thursday, July 23, 2026
Market Sentiment
U.S. equity futures are under pressure as rising AI infrastructure costs, mixed tech earnings, and escalating geopolitical risks weigh on sentiment.
Nasdaq weakness remains the key concern, with investors questioning the near-term returns on heavy AI spending.
Google’s capex outlook and disappointing results from Tesla and IBM are adding pressure.
Supermicro’s strong backlog is a rare positive for the AI hardware space.
Geopolitical and Oil Risk
Oil is extending gains as the Iran conflict and Houthi attacks raise supply and shipping concerns.
Higher crude prices could revive inflation fears and complicate the Fed’s disinflation outlook.
Energy and defensive sectors may benefit, while tech and consumer names could remain under pressure.
Key Catalysts
Initial Jobless Claims: 8:30 a.m. ET
Intel earnings: After the close
Investors will be watching Intel for updates on chip demand, AI revenue, and competitive positioning.
Premarket earnings include AAL, BLK, CMCSA, HON, LMT, RTX, TMUS, and UNP.
ES Technical Outlook
Bias and Trend
Whale bias is short into the U.S. open on elevated overnight large-trader volume.
ES remains rangebound and continues to struggle below its 50-day moving average at 7538.50.
Bulls need to reclaim the 50-day moving average to improve the near-term outlook.
The next major moving-average support is the 200-day at 7129.50.
Key Levels
Resistance: 7621–7626, 7760–7765, 8171–8176
Support: 7415–7420, 7160–7165
Volatility
The five-day average daily range increased slightly to 80.75 points.
Volatility remains moderately elevated despite typical summer trading conditions.
