FRYday Expiration, Record Highs and I’m Still Buying the Pullbacks

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Founder's Note:

Futures are flat, with no major data on tap for today.

The big SPX gamma for today is held by Firms, as you can see with TRACE. There are, or were, +10k contracts around the 7,800 strike which have been being closed up this morning. We also see a large chunk of them expiring at 9:30AM EST, which suggests they are some type of flex option. We are looking for another "drift up" day, with support in the 7,800-7,790 area. Upside may be driven by traders continuing to lean on vol. We've also now shifted the Risk Pivot to 7,775 from 7,680.

For market makers, if you zoom out from today and into next week you find nothing but negative gamma across all strikes. This speaks to the ability for volatility to move more than anticipated. Remember - vol works both ways, and so we are watching leaky upside just as much as a sharp downside move, and the map does suggest 7,900-8k are achievable.

We are not looking for a downside move until possibly Wed AM and VIX expiration. That being said, we are long some cheap longer dated puts as per our recent notes. Ultimately a break of the Risk Pivot (7,775) will lead us to press shorts.

Vol for pre-NVDA/FOMC has gotten very cheap, and so we cannot fault customers for not selling SPX strikes. We suspect that there are still traders out there trying to sell vol as its dropping sharply.

Here is QQQ IV (red) vs RV (realized vol, blue), and you can see that implied is tanking relative to realized. This IV<RV is pretty rare as you can see over the past 1.5 years. You may also note that QQQ IV is nearly back to lows - we suspect it will match lows into next weeks expirations.

As we move to OPEX we often look for vol to revert higher, and for extended upside price action to correct. The hitch here is that right after OPEX is NVDA + JHOLE, which are heavily hedged events.

ES Levels

The bull/bear line for the ES is at 7814.00. ES is currently trading around 7826.25, keeping the market on the bullish side of this key level. As long as price remains above 7814.00, buyers retain the near-term advantage.

Immediate support comes in at 7822.50, followed by the 7814.00 bull/bear line. If ES loses 7814.00, downside pressure could increase toward 7793.75 and then 7778.00, our lower intraday range target. Additional support below is at 7770.00 and 7764.25, with 7743.75 as the next major downside level.

On the upside, resistance is at 7838.50. A sustained push through that level opens the door to 7850.25, our upper intraday range target. If buyers can clear 7850.25 and maintain momentum, the next major resistance level is 7884.25.

Overall, the intraday bias remains bullish above 7814.00. Holding 7822.50 keeps ES positioned for another attempt at 7838.50 and 7850.25. A break back below 7814.00 would shift the short-term outlook bearish and bring 7793.75 and 7778.00 into focus.

NQ Levels

The bull/bear line for NQ is 30123.75. NQ is currently trading around 30228.00, putting price comfortably above this key level and keeping the near-term bias bullish. As long as NQ holds above 30123.75, buyers remain in control and pullbacks can be viewed as potential support tests.

Immediate resistance is 30272.75, the prior high. A sustained move above 30272.75 opens the door to 30376.75, today's upper range target. If momentum continues through the upper target, the next major resistance level is 30614.75.

On the downside, initial support comes in at 30188.50, followed by the bull/bear line at 30123.75. Losing 30123.75 would weaken the bullish setup and increase the chances of a deeper retracement toward 29870.75, today's lower range target.

Below 29870.75, additional support is located at 29825.00 and 29780.50. A failure to hold this support zone would expose 29632.75.

Overall, the NQ setup is bullish above 30123.75. The key near-term battle is 30272.75; clearing that level favors continuation toward 30376.75. A rejection from resistance followed by a break back below 30123.75 would shift the intraday outlook bearish and put 29870.75 back in play.

Polaris Trading Group Summary - For Thursday, August 13, 2026

The session developed into a constructive bullish-to-range trading day, with the early long thesis playing out well. Price respected the key Line in the Sand, fulfilled multiple upside objectives, and provided several opportunities to buy strength on pullbacks before transitioning into more rotational lunchtime trade.

Market Structure

• Cycle Day 2 began with the key 7775 ±5 Line in the Sand holding.

• The first upside objective at 7785 was already fulfilled in early trading.

• David maintained an early long lean, looking for buyers to reclaim and hold higher ground.

• Price then pushed through 7795 resistance and fulfilled the 7805 target.

• Once 7795 broke, the focus shifted to buying dips if former resistance converted into support.

• A test of 7820 became the next upside objective.

Positive Trade Highlights

• The strongest trades came from staying aligned with the long bias.

• A4 provided multiple long opportunities during the session.

• Freddie highlighted an especially strong retest near 7789.

• The room repeatedly focused on buying discounts into larger strength rather than fighting the trend.

• David kept an A4 runner working into midday before it eventually trailed out.

• By noon, David characterized the session as a “Round Trip Rhythm” and “Range Runner Day.”

Trading Mindset

• A major theme was to trade the chart in front of you rather than trade from fear of being stopped out.

• Traders were reminded that a market appearing “too high” does not automatically make it a short.

• The better approach was to remain aligned with the dominant force and wait for the correct configuration.

• David continued reinforcing the importance of bringing your “A-Game” and reacting to market structure instead of predicting it.

Key Lesson — The Isolation Approach

• David introduced a new trading concept called “The Isolation Approach.”

• The idea is to isolate specific trade setups and study them independently rather than becoming overwhelmed by every signal on the screen.

• Traders were encouraged to:

  • Take screenshots of quality trade signals.

  • Save examples such as the Premium Xtreme setup.

  • Build a personal trading Playbook.

  • Develop pattern recognition through repetition and review.

Additional Education

• The room discussed Opening Range Breakouts across different timeframes.

• There was additional instruction on:

  • Premium and discount reversals.

  • CCI crossover signals.

  • HVN-based trade locations.

  • Blending entries using micro contracts.

  • Understanding when an indicator is meaningful versus relying on a signal by itself.

• The broader lesson was that the PTG tools become more valuable as traders better understand context, location, and configuration.

Bottom Line

• The early bullish scenario worked well.

• Major upside targets were achieved.

• Buying pullbacks within strength produced the best opportunities.

• The market later transitioned into a more rotational range environment.

• The day's strongest lessons were to stay aligned, trust valid setups, manage runners properly, isolate repeatable patterns, and build a personal playbook from real trade examples.

DTG Room Preview – Friday, August 14, 2026

Geopolitics & Macro

• The U.S. is preparing additional economic measures against Iran, while blockade threats are already supporting crude oil.

• Middle East headlines remain a key volatility risk for ES and NQ, especially during thinner liquidity.

• Other headline risks include Ukraine, Israel, the West Bank, trade policy, and President Trump’s social media activity.

• July PPI was unchanged, reinforcing expectations for a steady Fed and keeping near-term rate-hike fears contained.

• Rising bond yields tied to heavy government and AI-related issuance remain a broader valuation risk, particularly for growth and technology stocks.

Today’s Economic Calendar

• 8:30am ET: Retail Sales

• 10:00am ET: UoM Consumer Sentiment

• 10:00am ET: UoM Inflation Expectations

• 10:00am ET: Business Inventories

Stocks in Focus

• NVDA: Goldman is reportedly discussing a financing deal tied to Nvidia, reinforcing strong capital-market demand around AI infrastructure.

• AMAT: Shares fell despite solid earnings as elevated expectations weighed on the reaction.

• RDDT: Reddit is rallying on news of upcoming S&P 500 inclusion, which could create additional passive-flow activity.

• No major earnings are scheduled today.

• BHP reports Monday morning.

ES Technicals

• ES pushed through 7800 Thursday and briefly reached a new all-time high before rejecting from the 7831/36 trendline.

• 7831/36 remains the key resistance zone overnight.

• A clean break above could turn 7831/36 into support.

• 7620/15 is the primary trendline support for today.

• The 50-day MA at 7560.75 remains loose support below.

• The 5-day average daily range increased to 55 points, up from 49.5.

Key ES Levels

• Resistance: 7831/36

• Support: 7620/15

• Lower Supports: 7449/54, 7313/08, 7127/22

Trader Positioning

• No meaningful whale bias overnight.

• Large-trader volume was mixed and too light to provide a significant directional signal.