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- Holiday Tape Gets Thin, But I’m Still Calling 7650 — Don’t Ruin the 4th Chasing Handles
Holiday Tape Gets Thin, But I’m Still Calling 7650 — Don’t Ruin the 4th Chasing Handles
Danny Riley
July 02, 2026
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It's going to get really lonely the next few days as more people ditch the screens for the 4th. My suggestion is simple: if you plan on trading, do less and pick your spots better. One of the things about the holiday is that the best way to ruin it is to lose money, like I did on yesterday's close.
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Dan @ GTC Traders
100 – 96 = 4
I have been perusing the ol’ interwebs of late. Fintwit or Fin-X or whatever we are calling that niche on X / Twitter now.
I have to say, I’m pretty baffled.
It seems there is a large segment that believes that the Federal Reserve … is about to cut interest rates.
What?
Are people remotely serious?
First of all, we have had FIVE YEARS of structural inflation. Structural inflation that we’ve been discussing from 2021 onwards. We told everyone back at the end of 2021 … this was not going to be transitory. What makes this more ironic is that for those that knew me from 2009 to 2019? I actually built my reputation in pointing out the flaw in every inflationista’s argument during that time, and consistently pointed out that Inflation would never pose a danger. Which it didn’t. I was right.
Regardless, I digress. We have had five years of structural inflation. Structural inflation, differs from just ‘inflation’, in that it is much more difficult to address. Standard inflation is a temporary price spike caused by short-term supply chain hiccups or sudden surges in consumer demand. In contrast, structural inflation is driven by deep, permanent shifts in the underlying economy like labor shortages, deglobalization, or aging demographics. Because of this, regular inflation can usually be cooled down by raising interest rates, while structural inflation is far more stubborn, and difficult to address. And never mind the fact that GTC Traders has pretty much pointed out ahead of time, every new ‘flare up’ of inflation we’ve seen in 2025 and 2026.
We now have the biggest gap between Fed Funds Target (3.50% to 3.75%) … since 2021.
And we saw how 2021 turned out.
We have seen report after report showing a resilient labor force.
We have seen a Fed, that the meeting before last, see a large segment of the 12 voting members tell us that they wanted all cutting language demonstrating a bias removed from Federal Reserve statements. Signaling that they understood they may need to move against inflation by hiking, once again.
We have report after report of constant, unrelenting inflationary input data.
And dropping oil prices? Do you think that’s going to bring down inflation?
You mean … that the consumer that has shown incredible reslience in the face of all of the above with expanding and inflationary consumer econometric data … get’s a shot in the arm and encouragement to spend more?
We have the crack-spread … hitting brand new highs?
And I’m perusing Fin-X and I’m finding people talk about ‘transitory’ inflation?
Transitory?
Inflation Rate
May 2025 to Present
It boggles my mind that anyone is still using the word “transitory”. I would think the great 2021 fumble, would embarrass anyone from using that term.
Regardless … in addition to all of the above?
SOFR 1 Month Contracts are stating … pretty clearly, that one hike is on the way.
Here … here is a chart of SR1Z2026 …
It’s holding pretty stead at 96.00. The SOFR 1-Month Contract (SR1) serves as a critical real-time gauge for market expectations of the Federal Reserve's path, functioning much like the standard Fed Funds futures. Currently holding steady at 96.00, this highly influential benchmark implies an expected interest rate of 4.00% (100 - 96 = 4.00). With the actual Federal Reserve Funds target sitting lower at 3.50% to 3.75%, the market is loudly signaling that at least one more rate hike is actively being priced in, directly contradicting any mainstream narratives of incoming rate cuts.
Of course, any non-linear input can happen between now and December. Anything could happen.
But for now? The probabilities are pretty strong that if things stand as they are now … one rate hike is on the way.
Until next time, stay safe, and trade well ...
Scott Rubner from Goldman Sachs highlighted a classic, sharp institutional market pivot—what he terms an "Up Crash" or a massive rotation hitting the market right at the start of July.
Here is a breakdown of exactly what those components mean for market structure and flow:
1. New Money Put to Work Into Laggards
As noted in your earlier commentary regarding the July seasonal patterns, a massive amount of new passive capital inflows (from retirement accounts, mutual fund distributions, and mid-year allocations) mechanically floods the market on the first trading day of July. Rubner is pointing out that instead of chasing the already overextended AI/Mega-Cap leaders, this fresh capital is actively rotating into the "laggards"—the underperformed sectors, small caps (like the Russell), and value stocks.
2. Seasonal Negative Momentum (Momo)
While the first half of July is historically one of the most bullish periods of the year for the broad market, the technical momentum ("momo") models for the dominant market leaders are stretched. When money aggressively exits the top-tier momentum names to chase lagging sectors, it triggers a "negative momentum" loop for the standard tech leaders, even if the underlying index remains supported.
3. Quant Unwinds
Systematic funds, CTAs, and quantitative algorithms are heavily exposed to specific factor models (like "Long Growth / Short Value"). When a sudden rotational shift occurs, these algorithmic models are forced to rapidly unwind their positions to manage risk. This means they mechanically buy back what they were short and sell what they were long, aggressively accelerating the intraday price action.
4. Broadening into Q2 Earnings
Up until now, index gains have been incredibly top-heavy, driven primarily by the Mag 7. Rubner is highlighting a "broadening" out of the market structure ahead of the Q2 earnings season. Investors are looking for earnings growth to expand outside of just tech and into the other 493 stocks of the S&P 500, fundamentally changing the daily market tape.
5. Most Short Themes (M7) At Risk of a Big Rally
An "Up Crash" typically refers to a violent squeeze to the upside that catches under-hedged or short-positioned traders completely off guard. If market participants were heavily shorting the broader laggard themes or expecting a major correction across the board, a sudden, powerful influx of seasonal money combined with quant unwinds can cause an aggressive, vertical squeeze across the broader market.
The first Globex session of July had a 7550.75 high and a 7510.50 low and opened Wednesday's regular session at 7532.00, down 12.50 points or -0.17%.
After the open, the ES traded 7534.00, 28.25 points down to 7505.75 at 9:35, rallied 48.00 points up to 7553.75 at 10:25, sold off 13.50 points down to 7540.25, rallied 38.25 points up to 7578.50 at 11:30. It then sold off down to 7567.50 at 11:35, rallied up to a new high at 7579.00 at 12:20, sold off 24.25 points down to 7554.75 at 1:05, rallied up to 7568.50 at 1:25, sold off down to 7551.50 at 2:15, traded 7560.25, sold off down to a 7549.25 double print low at 2:55, rallied 112.50 points up to 7561.75 at 3:05, sold off down to 7547.00 at 3:49, and traded 7549.25 as the Nasdaq 3:50 cash imbalance showed $1.5 billion to buy. The ES then sold off down to 7536.50, and traded 7542.00 on the 4:00 cash close.
After 4:00, the ES sold off down to 7543 at 4:35 and settled at 7532.75, down 15.5 points or -0.21%; the NQ settled at 30,064.25, down 459.25 points or -1.50%; the YM settled at 52,603.00, down 67 points or -0.13%; and the RTY settled at 3,031.00, down 14.60 points or -0.48%.
It was a mixed bag in other indices:
Gold (GCU26) +0.15%
Silver (SIQ26) has closed up 2 sessions in a row, up 3.18%
Dollar Index (DXY) +0.21%
10 Yr Note (ZNU26) closed down 0.31%
30 Yr Bond (ZBU26) closed down 0.83%
Bitcoin (BITN26) closed up 2.17%
In the end, after big month-end markups, many of the big tech/AI names were weak. In terms of the ES's overall tone, it shook off the early weakness. In terms of the ES's overall trade, volume was higher than I would have expected, considering 72 million people are traveling this week for the July 4th holiday, at 1.248 million contracts traded.
I am going to reduce the size of the OP today; again, there isn't anything I can say we don't already know.
MiM
The MOC opened at 15:51 with a modest all-market buy imbalance of +$804.71M, but the read was not as clean as the dollar total suggested. The dollar lean was +54.6% buy, while the symbol lean was -54.1% sell, with 317 buy symbols vs. 373 sell symbols. That made the opening imbalance more rotational than directional, even though the dollar side leaned buy.
The key story was the transition. After the opening buy, the imbalance quickly faded to almost flat at 15:52 and then flipped hard to the sell side. By 15:53, the MOC was -$2.279B, then deepened to -$4.113B at 15:54 and reached the session’s heaviest sell reading at 15:55, near -$5.391B. From there, the sell pressure backed off but never fully reversed, finishing at 16:00 with a still-negative -$1.676B imbalance. The close was a clear sell-side transition from an initially mixed buy print.
The strongest wholesale-style buying was in Nasdaq, which opened at +$1.547B with a +67.0% dollar lean and +68.6% symbol lean. That is notable because both dollar and symbol leans were above the 66% threshold. Tech was the main buyer, led by NVDA, MU, MRVL, CSCO, AMD, AVGO, INTC, and SNDK. Information Technology finished with +$1.707B and an +80.0% dollar lean, showing heavy dollar demand, though its symbol lean was more rotational at +52.4%.
On the sell side, Financials stood out as the clearest wholesale liquidation sector, with -$717.72M, an -82.2% dollar lean, and -70.0% symbol lean. Consumer Discretionary was also heavily offered at -$254.07M, with a -72.6% dollar lean. Communication Services, Industrials, Energy, and Utilities also leaned sell. Overall, the close began mixed, briefly looked buy-biased, then decisively transitioned into broad sell pressure beneath Nasdaq/tech strength.
Today’s Links:
Daily Breadth Data 📊
For Wednesday, July 1, 2026
• NYSE Breadth: 50% Upside Volume
• Nasdaq Breadth: 51% Upside Volume
• Total Breadth: 51% Upside Volume
• NYSE Advance/Decline: 56% Advance
• Nasdaq Advance/Decline: 54% Advance
• Total Advance/Decline: 55% Advance
• NYSE New Highs/New Lows: 163 / 38
• Nasdaq New Highs/New Lows: 353 / 90
• NYSE TRIN: 1.29
• Nasdaq TRIN: 1.13
Weekly Breadth Data 📈
For the Week Ending Friday, June 26, 2026
• NYSE Breadth: 55% Upside Volume
• Nasdaq Breadth: 58% Upside Volume
• Total Breadth: 57% Upside Volume
• NYSE Advance/Decline: 55% Advance
• Nasdaq Advance/Decline: 47% Advance
• Total Advance/Decline: 50% Advance
• NYSE New Highs/New Lows: 337 / 243
• Nasdaq New Highs/New Lows: 745 / 648
• NYSE TRIN: 0.98
• Nasdaq TRIN: 0.66
S&P 500/NQ 100 BTS Trading Levels (Premium Only)
BTS are daily generated levels created using a combination of proprietary calculations and AI to define an upper range target and a lower range target, split by a bull/bear line. You receive daily charts along with clear descriptions of each level to help guide your trading.
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Today’s Economic Calendar
Earnings:
NO SP500 Earnings today
PTG Room Summary – For Wednesday, July 1, 2026
Wednesday was a textbook PTG Daily Trade Strategy session, with the market respecting David’s 7545 Line in the Sand and delivering opportunities on both sides. The day produced a clean downside move into the lower target zone, a strong reversal from the early low, and a rally into the upside objectives before settling back near the LIS.
Pre-Market Framework
David identified 7545 as the key Line in the Sand for the session.
The trade plan was built around acceptance above or below the 7545 ±5 zone.
The room was focused on Cycle Day 1 behavior, where an early decline can often produce a secure low.
Bear Case: Rotation Below 7545
The bear scenario called for acceptance south of 7545 ±5.
Downside objectives were:
7535
7525
7515
The market followed this path early, rotating lower and fulfilling the downside target area.
Price ultimately produced a secure early-session low at 7505.75.
Bull Case: Reversal From the Secure Low
After the early low was established, sellers appeared to exhaust.
Members noted that “the sellers stopped” and the “last seller sold.”
This gave buyers the opportunity to regain control.
Price rallied strongly back through the Line in the Sand.
Upside Objectives Fulfilled
The bull scenario called for acceptance north of 7545 ±5.
Upside objectives were:
7565
7575
7585
The rally fulfilled the key upside objective at 7575 before reversing.
David later described it as a “fantastic day” for the DTS briefing, with the market nailing the lower target and then fulfilling the upper target.
Key Lessons From the Session
Stay aligned with the dominant force
The market first favored sellers below the LIS, then shifted to buyers after the secure low formed.
Trade location, not emotion
The best opportunities came from respecting predefined levels rather than chasing price.
The Line in the Sand mattered
The 7545 zone served as the central decision point throughout the session.
Cycle Day 1 played out well
The expected decline produced an early secure low, followed by a strong rally into upside objectives.
End-of-Day Takeaway
Price completed a full round trip from the lower target zone to the upper target zone.
By late afternoon, the market was settling near the 7545 Line in the Sand again.
The session reinforced the value of having a structured plan, clear targets, and patience to let the market confirm direction.
DTG Room Preview – Thursday, July 2, 2026
Holiday Week / Market Schedule
This is a shortened holiday week.
US stock markets are closed tomorrow, Friday, July 3, for the Fourth of July holiday.
Volume may fade after the morning data, with volatility potentially muted into the long weekend.
Macro Focus
US stock futures are trading defensively ahead of the June Jobs Report at 8:30am ET.
The jobs data is the key catalyst and could either reinforce or challenge the Fed’s higher-for-longer stance.
Weekly Unemployment Claims are also due at 8:30am ET, followed by Factory Orders at 10:00am ET.
San Francisco Fed President Mary Daly speaks at 7:45am ET.
Cross-Asset Tone
Oil continues to decline as supply-disruption fears ease around the Strait of Hormuz.
Softer crude may help reduce inflation concerns and support rate-sensitive areas.
The dollar remains firm, keeping the broader tone cautious.
Bitcoin strength is adding some speculative support to high-beta tech, though macro data remains the main driver.
Fed / Rates Backdrop
Fed commentary continues to reinforce a restrictive policy stance.
Kevin Warsh reaffirmed the Fed’s 2% inflation target and central-bank independence.
Markets continue to view Fed resistance as a ceiling on upside momentum.
Tech / AI Sentiment
CoreWeave fell sharply after reports that Meta may sell excess AI compute capacity.
The headline pressured AI-infrastructure names and added to broader tech volatility.
SK Hynix’s $64B chip-plant investment reinforces longer-term confidence in AI semiconductor demand.
Semiconductors remain a key leadership group despite short-term AI and policy-related volatility.
Volatility / Flow
Volatility continues to contract but remains moderately elevated.
ES 5-day average daily range fell to 94.75 points from Tuesday’s 98.50.
No whale bias today, as overnight large-trader volume was too light to be meaningful.
ES Technical Picture
ES traded sideways Wednesday while holding above the 50-day moving average near 7473.50.
That 50-day MA remains loose support and could be retested after the Jobs Report.
ES also moved within roughly 20 points of the intermediate-term downtrend channel top near 7600/7595.
Failure to retest or reclaim that area could be short-term bearish.
Key ES Levels
Resistance: 7605/7600, 8035/8040
Support: 7425/7420, 7286/7281, 7210/7205
