Our Lean — Danny’s Trade (Premium only)

The ES traded in a 7716.50 to 7770.50 Globex range, with approximately 213K contracts traded, and opened Tuesday’s 9:30 ET regular session at 7726.50, down 42.25 points, or −0.54%.

After the open, the ES quickly sold off to 7719.00, rallied 16.25 points to the session high at 7735.25 around 9:40, and then sold off 18.75 points to 7716.50 at 10:10. It rallied back to 7732.75 at 10:30, rolled over, and traded down to 7713.25 at 11:20, rallied 15.50 points to 7728.75 at 12:20, drifted lower through the early afternoon, and sold off to 7714.25 at 2:05.

It rallied 11.75 points to 7726.00 at 2:20, pulled back to 7716.25 around 3:00, and bounced to 7722.25 at 3:25. It sold off down to the regular-session low of 7710.25 at 3:45 and traded 7719.00 as the 3:50 cash imbalance came out small to sell and dropped down to $900 million to sell and traded 7715.25 on the 4:00 cash close.

After 4:00, the ES traded in a narrow range and settled at 7714.00, down 54.75 points, or −0.70%, the NQ settled at 29,570.25, down 525.75 points, or −1.75%, the YM settled at 53,406, down 138 points, or −0.26%, and the RTY settled at 3025.50, down 39.40 points, or −1.29% on the day.

In the end, the ES has fallen 3 sessions in a row for a total loss of 108.50 points or -1.39%, and the NQ has also closed down 3 sessions in a row, with last Friday’s loss of -46.75 points and Monday’s loss of 45.75 points, has a total loss of 618.25points or -2% in the last 3 sessions.

In terms of the ES’s overall tone, it was weak and stayed that way despite the bonds being down early in the day and closing higher. In terms of the ES’s overall trade, volume was higher at 1.217 million contracts traded, the highest in 7 sessions.

The Bottom Line: The 60 Day Extension Is Over

Global borrowing costs surged to multiyear highs amid concerns about inflation, heavy government spending, and rising AI-related debt issuance, pushing the 30-year Treasury yield to 5.337%, the highest intraday level since 2007, while Japan’s long-term yields reached their highest levels since at least 2006. The Nasdaq fell 1.3% as the PHLX Semiconductor Index plunged more than 5%, led by Intel, Marvell, Arm, Coherent and Teradyne. Continued tension in the Middle East added to the selling after Iran fired two ballistic missiles toward the Strait of Hormuz and struck a bulk carrier east of Oman following the expiration of a 60-day U.S.-Iran truce. President Trump said no new talks are planned, while Brent crude edged higher to $91.02 a barrel.

Polaris Trading Group

****NEW**** PTG Trading Room Recordings

We are now recording the PTG Trading Room Morning Session. These will be “raw” unedited and possibly lengthy. While watching, adjusting the playback speed is recommended. You will be able to find the most recent five (5) session recordings here: Polaris Trading Group Videos

📊 Cycle Day 3: Respect the Odds

Our Positive Three-Day Cycle currently carries a:

🚀 92.92% Historical Performance Rate

Notice we said probability…

…not prophecy.

PTG has never traded certainty.

We trade statistical edges.

Markets have an annoying habit of remaining irrational long after traders have exhausted both their capital and their patience trying to call the top.

Respect the statistics.

Respect price.

Everything else is simply financial entertainment.

🟢 Bull Script

Acceptance Above 7715 ±5

As long as buyers continue defending value above this pivot, institutions remain firmly in control.

Initial Objectives

🎯 7725
🎯 7735
🎯 7745

Expect:

• Orderly auction
• Healthy participation
• Trend continuation
• Bears questioning their career choices

🔴 Bear Script

Acceptance Below 7715 ±5

Lose the pivot and the auction changes character.

Instead of trend…

Expect repair.

Instead of momentum…

Expect rotation.

Initial Objectives

🎯 7705
🎯 7695
🎯 7690

Expect:

• Two-way trade
• Inventory correction
• Balance development
• Opportunistic buyers patiently waiting below

📊 PTG Reference Board

PVA High Edge: 7728

PVA Low Edge: 7716

Prior POC: 7724

Cycle Day 1 Low: 7763.50

🎯 PTG Bottom Line

Nothing changes.

Our job has never been predicting tomorrow’s headlines.

Our job is identifying who controls the auction—and trading alongside them.

Take only Triple-A Setups.

Manage your $RISK before counting your profits.

Hard Stop-Loss Orders belong on the exchange—not floating around in your imagination.

Remember…

The market pays traders who stay aligned with the Dominant Force.

Everyone else simply provides the liquidity.

⚠️ Tactical Takeaway

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.

   ES

 Full DTS Briefing Report 

— PTG

JP Morgan

When will the Fed hike? It doesn’t matter

It’s a game of will they or won’t they. Will the Federal Reserve raise interest rates, remain on hold or wait until later in the year? For investors betting on a continued stock-market rally, the timing of the next move may be less important than the total number of hikes.

Markets currently expect one rate hike by the end of the year, with the possibility of another during the next 12 months. As long as the Fed delivers no more than one or two 25-basis-point increases, stocks and other risk assets could remain resilient.

The probability of a September hike declined after July CPI matched expectations at 3.4%. Two consecutive rounds of softer-than-expected inflation and employment data have also reduced the chances of a prolonged tightening cycle designed to cool an overheating economy.

That is important because aggressive rate-hiking cycles have historically created problems for stocks. The Fed raised rates by 225 basis points from 2015 through 2018 and by more than 500 basis points from 2022 through 2023. Stocks suffered drawdowns of more than 20% during both periods, although higher rates were not the only cause.

A repeat of those aggressive tightening cycles appears unlikely under current economic conditions. If the Fed delivers a single 25-basis-point hike that is already reflected in market expectations, the initial reaction could be limited. The bigger threat would be a shift toward several additional hikes, which could push bond yields higher, tighten financial conditions and pressure stock valuations.

What would a 25-basis-point rate hike priced into market expectations do to market returns – if it were to materialize?

Measuring the Impact

The two most recent Fed-related market sell offs provide a useful comparison. The S&P 500 declined approximately 20% in late 2018 and 28% in 2022, averaging a 3.3% drop for every 25-basis-point rate increase.

However, most markets have already matched or exceeded their implied moves since mid-June, suggesting that a single 25-basis-point hike is largely priced in. The greater risk would be the Fed signaling that several additional increases are coming.

Peak-to-Trough Declines in 2018 and 2022 Compared With Recent Market Moves

Even if a 25-basis-point hike triggers a 5% pullback, that would not be unusual. Since the 2008 financial crisis, the S&P 500 has averaged roughly three 5% declines per year. The index has already pulled back approximately 4% since mid-June, when markets began pricing in higher rates. Concerns about AI profitability and corporate earnings contributed to the decline, but changing bond-market expectations also played a role.

The reaction in stocks could be even smaller because the effects of tighter policy would likely be spread across several asset classes. Markets have also become less sensitive to individual rate moves over time, making the Fed’s guidance and the total size of the tightening cycle more important than a single hike. When policy changes are clearly communicated in advance, investors have time to adjust before the decision arrives.

This is a simplified comparison, and market drawdowns cannot be attributed entirely to rate increases. Economic growth, inflation, employment, earnings, geopolitical developments and the size of each hike can all influence the market’s response. Dividing a decline by the number of completed hikes may therefore exaggerate the effect of each 25-basis-point increase.

The timing of the Fed’s next move could change as new inflation and employment reports are released. However, the market should be able to absorb one or two modest hikes as long as the Fed does not tighten policy more aggressively than investors currently expect.

MOC Recap: Semiconductor Buying Meets Broad Sell Program

The MOC opened with a modest $388.0M sell imbalance, but the underlying flow was already tilted toward sellers. Buy volume stood at $3.9B against $4.3B of sells, producing a -52.4% dollar lean and -57.7% symbol lean. With 290 stocks buying against 395 selling, the opening read was bearish but still relatively rotational.

That changed quickly. The imbalance expanded to -$908.0M at 15:52 and -$1.2B at 15:53 before accelerating sharply to -$3.1B at 15:54. By 15:55, the sell program peaked at -$4.1B, with $6.3B to sell against only $2.2B to buy. The dollar lean reached -74.1%, clearly signaling wholesale selling rather than simple rotation.

Selling moderated into the bell, with the net imbalance improving to -$1.1B at 16:00. However, the final -79.2% dollar lean and -74.2% symbol lean showed that the remaining orders were still overwhelmingly sell-side.

Technology was the major exception. Information Technology finished +$1.2B with a +69.3% dollar lean, driven by aggressive semiconductor demand. MU led buying at $538.4M, followed by NVDA at $236.7M, INTC at $169.4M, AMAT at $129.2M, MRVL at $126.0M and LRCX at $125.2M.

That strength masked substantial selling elsewhere in technology. MSFT showed $248.0M to sell, AAPL $220.7M, PLTR $73.3M and CRM $63.4M.

Communication Services was the strongest sector sell at -95.7%, with GOOG and GOOGL prominent. Consumer Discretionary was -81.6%, Real Estate -85.1%, Materials -78.6%, Utilities -75.0%, Health Care -72.5% and Energy -69.9%. AMZN, WBS, XOM, BKNG and JNJ were also notable sell-side names.

The close was therefore a broad sell program underneath a very concentrated semiconductor buy rotation.

How to read the MIM

ES & NQ Futures trading levels (Premium only)

Discovery Trading Group Room Preview – Wednesday, August 19, 2026

Market Overview

• Markets enter Fed day on a defensive footing, with tech leading early weakness as elevated yields continue to pressure valuation-sensitive names.

• Higher yields remain the dominant macro headwind, particularly for NQ, while thin liquidity could amplify intraday swings.

• Rising oil prices and U.S.–Iran tensions are adding to inflation concerns and keeping geopolitical headlines in focus.

Today’s Catalysts

• Crude Oil Inventories are due at 10:30 a.m. ET.

• July FOMC Meeting Minutes are released at 2:00 p.m. ET.

• Traders will focus on the officials who favored a rate hike and how the Fed is balancing softer labor data, cooling inflation, and higher energy prices.

• Crypto regulation, legal pressure on large-cap tech, and continued AI-related developments may create additional stock-specific volatility.

Earnings

• Premarket: ADI, LOW, TGT, EL, TJX, VIK.

• Thursday morning: AEG, BABA, DE, NTES, WMT, ROST.

ES Outlook

• The ES 5-day average daily range remains near 55.5 points.

• No whale bias this morning, as overnight large-trader volume was too light to be significant.

• ES has pulled back toward the middle of its nearest trendlines, which may keep those levels out of play unless volatility expands.

• The 7838–7845 area remains key resistance. A clean break above could turn that zone into support.

• The 7620–7615 area remains the primary trendline support.

• The 50-day MA near 7572 remains looser support below.

Key ES Levels

• Resistance: 7840–7845

• Support: 7620–7615

• Lower supports: 7463–7458, 7313–7308, 7125–7120