Never Forget

Get instant access to our partners’ real-time market data and insights not available anywhere else. Here is last night's Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. - MrTopStep

Founder's Note:

Futures are up 50bps, with oil (CL) -3.5% due to some Iran headlines.

CPI at 8:30AM EST. The market is pricing in a 69% chance of a hike next week.

The SPX 0DTE straddle is at $52/68bps (ref 7,630). That is relatively rich compared to previous trading days, but at 68bps this market is not too terribly stressed about today's print.

Yesterday we highlighted that the risk line from 7,600, and that remains the case. We currently project that through next week negative gamma lies <7,600. <7,600 was tested yesterday AM, when well-timed positive oil headlines and 0DTE came in to offer support (see PM note). A hot CPI may push the SPX below this level today, and unless there is a clear pause in conflicts we do not think traders will want to be short of vol over this weekend - particularly will next weeks events keeping vol primed. Given this dynamic, a knee-jerk positive CPI reaction into ~7,675 is certainly possible, but a more sustained rally fuel is not likely in place (due to vols).

This weekend may hold more risk than normal given the weekend and the flaring of Iran tensions, with the SPX dancing just above a large pocket of negative gamma. Tread lightly.

Yesterday we talked about how the equity market is being dragged by oil prices, and then a hot PPI was dropped. With that we saw the US 10Y touch 4.98% intraday which is the highest since Oct '23. Rates pulled back a few bps this AM due to oil, with CPI adding another catalyst this AM.

We also flagged signs of traders starting to hedge downside in stocks, and upside in oil. That theme continued yesterday with stocks moving more "upper left" on Compass (red arrow) - a sign of higher IV and steeper puts. Oil (USO, green arrow) kept working to the opposite direction, which is a sign of higher IV and a steepening call skew.

There is one sector which is getting quite interesting from a vol perspective: tech. SMH IV is below, and as you can see it has mean-reverted to a long term mean. We think that over the next week tech and SMH will really start to move - either lower on macro concerns (stock down, vol up) or it will get some positive data and start to chase mid term upside (stock up, vol up). For dynamic hedgers, this is a decent enough idea as you can monetize a straddle or other long structure by hedging. For us more in the retail community we like owning SMH options with the idea of November upside structures and/or shorter dated downside put structures.

©2025 TenTen Capital LLC DBA SpotGamma

All TenTen Capital LLC DBA SpotGamma materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. VIEW FULL RISK DISCLOSURE https://spotgamma.com/model-faq/disclaimer/

ES Levels

The bull/bear line for the ES is at 7609.50. ES is currently trading around 7638.25, keeping the short-term bias bullish as long as price remains above 7609.50. Holding above this level favors buying dips, while a break back below it would weaken the setup.

On the upside, initial resistance comes in at 7646.50, followed by 7652.50, today’s upper range target. A sustained push through 7652.50 opens the door to 7666.25, with stronger resistance above at 7692.75.

On the downside, 7609.50 is the first major support and the key dividing line for the session. Below that, support comes in at 7598.50, 7585.50, and 7580.00. Today’s lower range target is 7566.50. A clean break below 7566.50 could extend the decline toward 7526.25.

Overall, ES remains bullish above 7609.50. Bulls need to clear 7646.50 and 7652.50 to extend the move, while bears need a break back below 7609.50 to shift momentum lower.

NQ - U Levels

The bull/bear line for the NQ is at 29191.50. NQ is currently trading around 29304.50, keeping the market above this key pivot and giving bulls the short-term advantage. As long as price holds above 29191.50, look for buyers to defend pullbacks and attempt another push higher.

On the upside, initial resistance comes in at 29419.75, which is today’s upper range target. Above that, resistance sits at 29458.50, followed by 29511.25. A sustained breakout through 29511.25 would open the door toward 29634.50.

On the downside, 29191.50 is the first major support and the most important level for maintaining the bullish setup. Below there, support comes in at 29135.25 and then 29043.25. Today’s lower range target is 28963.25. A failure at 29191.50 would shift momentum back toward the bears and increase the odds of testing those lower levels.

Overall, the NQ remains bullish above 29191.50, but price is still recovering from the sharp prior-session decline. Bulls need to clear 29419.75 and 29458.50 to strengthen the recovery. Below 29191.50, the setup turns bearish with 29135.25, 29043.25, and 28963.25 becoming the primary downside targets.

Polaris Trading Group Summary - For Thursday, September 10, 2026

Thursday developed into a textbook Cycle Day 1, with David’s downside projections providing a clear roadmap from the overnight session through the morning decline. The strongest opportunities came from staying aligned with the bearish structure, respecting predefined targets, and recognizing the reversal once the average decline projection was fulfilled.

Morning Setup and Key Levels

• David identified 7650 as the Line in the Sand.

• The initial upside target at 7665 had already been fulfilled and rejected overnight.

• That rejection reinforced 7665 as an important reference level going forward.

• Price moved into the previously identified 7620–7618 pivot zone.

• The 7607 Cycle Day 1 violation target was fulfilled early.

• David then identified 7593 as the next downside violation target.

Best Trading Opportunities

• The strongest opportunity was the morning short-side move.

• Traders following the Cycle Day 1 framework had a clear series of downside reference points:

  • 7620–7618 pivot zone

  • 7607 violation target

  • 7593 violation target

  • 7588–7585 Average Decline Projection Zone

• Shortly after 10:00 AM, price reached the 7588–7585 projected decline zone.

• David also noted 7582 as a possible Cycle Day 1 range-low objective.

• The move was characterized by long liquidation and strong downside momentum.

Reversal From the Projection Zone

• Price reversed from the 7588–7585 Average Decline Projection Zone.

• The rebound carried price back toward VWAP.

• This validated the projection zone as both a downside target and a potential reversal area.

• For short sellers, it provided a logical area to reduce exposure or lock in gains.

• For traders comfortable with reversal setups, it created a potential tactical long opportunity.

Midday Market Behavior

• Once the projected decline had been fulfilled, David shifted focus to whether bulls could gain acceptance above VWAP.

• Bulls needed sustained acceptance above VWAP to begin repairing the morning decline.

• Instead, the market returned to range-style rhythms.

• The easy directional portion of the morning move had largely passed.

• Lunch-hour conditions favored patience rather than forcing additional trades.

Afternoon Session

• Morning weakness began to reengage after 2:00 PM.

• David noted that bulls had only managed to pause the selling pressure.

• Price returned to test the opening range.

• Bulls continued to struggle for traction into the final Hour of Power.

• Despite renewed weakness, neither side generated strong follow-through late in the session.

• The market ultimately settled near the opening-range area.

Positive Takeaways

• The Cycle Day 1 roadmap worked very well throughout the session.

• Multiple downside targets were fulfilled in sequence.

• The 7588–7585 Average Decline Projection Zone successfully identified the area of the session low.

• Traders who remained aligned with the dominant bearish structure had clearly defined objectives instead of having to guess where the decline might end.

• The reversal from the projected decline zone offered an excellent example of transitioning from directional trading to a more balanced market expectation.

Lessons Learned

• Predefined levels provide structure and reduce emotional decision-making.

• Early chop does not automatically invalidate the larger directional thesis.

• Staying aligned with the Cycle Day structure was more effective than reacting to every short-term bounce.

• Once a major projection has been fulfilled, traders should reassess rather than continue pressing the same directional trade.

• The reversal back toward VWAP was an important signal that the market was transitioning away from the strong morning trend.

• Recognizing when conditions shift from directional movement to range-style trading can help protect gains and prevent overtrading.

Day in Review

• Thursday was a well-defined Cycle Day 1.

• The morning short-side move provided the best opportunity of the session.

• The projected downside roadmap was fulfilled with strong precision.

• The 7588–7585 zone marked the key reversal area.

• The most important takeaway was to trust the planned structure, respect targets, and adjust quickly once the market transitions from trend to range.

DTG Room Preview – For Friday, September 11, 2026

Macro & Inflation

• Index futures are cautious ahead of today’s PPI and tomorrow’s CPI, with both reports likely to shape near-term Fed expectations.

• Treasury yields remain the key signal for ES; hotter inflation data could pressure valuations and rate-sensitive sectors.

• VIX is firming into the releases, suggesting traders are adding protection ahead of potentially volatile data.

Geopolitics & Crude Oil

• Brent crude remains above $100 following a major wave of tanker attacks tied to the widening Middle East conflict.

• Further escalation involving Iran could increase supply-disruption risk and keep pressure on transportation, manufacturing, and consumer-related names.

• Persistent crude strength is generally a headwind for ES/YM while providing support for energy stocks.

China / Trade

• China purchased 1 million tons of U.S. soybeans ahead of Xi’s Washington visit, offering a potentially constructive signal for U.S.-China trade relations.

• Additional purchases or diplomatic progress could reduce tariff and supply-chain concerns and support cyclical sentiment.

Tech & AI

• Apple unveiled the iPhone 18 lineup, foldable iPhone Duo, and new AI-enabled wearables, creating a potentially important product-cycle catalyst for AAPL and NQ.

• Nvidia faces regulatory scrutiny related to its Groq licensing deal, while chip-supply constraints continue to affect AI infrastructure buildouts.

• Anthropic reported another cybersecurity incident, adding to concerns around AI-model security.

• A wave of AI-related IPOs could create rotation within technology as investors balance new issuance against existing mega-cap exposure.

Earnings

• After the close: ADBE, CPRT, ORCL.

• Friday morning: KR.

Economic Calendar

• 8:30 AM ET: PPI and Weekly Unemployment Claims.

• 10:00 AM ET: Existing Home Sales and Wholesale Inventories.

• 12:00 PM ET: Crude Oil Inventories.

Volatility

• ES 5-day average daily range declined to 70 points from Tuesday’s 74.75.

• Key volatility risks remain geopolitical headlines, Fed/Treasury commentary, and President Trump social-media posts.

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

ES Technicals

• ES bounced from its 50-day MA at 7633.25 on Wednesday, keeping that level as loose support.

• Below, the former intermediate-term downtrend channel top at 7615/12 and short-term downtrend channel bottom at 7589/84 are key support zones.

• A decisive break through those supports would increase the likelihood of a move toward the 7500 area.

• Trendline resistance: 7647/42, 7865/70.

• Trendline support: 7615/12, 7589/84, 7489/94, 7295/90, 7085/7080.