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Nothing Goes Up Forever
Danny Riley
June 08, 2026
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For months, if not years, tech and AI companies have powered the markets higher. How many times have you heard that the Magnificent 7 account for 34% of the gains, or that the top 25 stocks account for over 40%?
Is it over-exuberance? Or over-enthusiasm? Are the markets selling off because of the Middle East war, the energy shock it’s causing, and that it is pushing up inflation? In all honesty, I think it’s “all of the above.”
When people talk about how expensive things have become, I get it. While I know this is not the best example, when I first moved to Delray Beach, FL, a hamburger was $8.00—today it’s $18.00. Gas was $1.80—now it’s close to $5.00.
If I go out with my wife, it costs over $100 to have lunch or dinner, and if I take my daughter and granddaughter, it’s $160, and that doesn’t include a 20% or 22% tip. As the years wear on, the cost of living has skyrocketed, and I hate to tell you, but as interest rates rise, so will everything else.
As I have always said, I’m not a Wall Street analyst or an economist; I barely got out of high school. My true education was on the trading floors of the Chicago Board of Trade and the Chicago Mercantile Exchange, where I did business for some of the largest hedge funds, banks, and pro-trading firms in the world.
I have been part of every major market correction since 1985, and all I can say is... nothing goes up forever.
Our View
The futures index markets opened lower Sunday night and then rallied, and are currently trading higher on Globex.
This is going to be another big week, with the inflation gauge Consumer Price Index (CPI) numbers on Wednesday, followed by Thursday’s Producer Price Index (PPI) report, which will provide a look at how prices are moving on input goods purchased by manufacturers and other producers.
The week ends with the University of Michigan’s bimonthly reading on US economic sentiment and inflation expectations, the largest IPO in history—the SpaceX listing at $135 per share on the Nasdaq, which would put the company’s total market valuation upon listing roughly between $1.75 trillion and $1.8 trillion—and the week 2 June options expiration.
After last week, all I can say is... there is reason to be concerned, and I highly doubt this will all go smoothly.
I think the markets went down too much, too fast. Does that mean they can’t go further? No, but I do think we may see some short covering.
There were two things that really had a big impact on Friday’s trade: the first was all the talk about rate hikes, and the second was the massive gamma squeeze. With that out of the way, I think we could see less selling pressure.
Our lean: Ideally, I just want to get a look at the price action before I call for any directional trades. My gut says we can see a bounce, but if the bonds are weak and crude is up, then you have to sell the rips.
Vice versa, if the bonds are up and crude is down, you can buy weakness.
5-Day YM, ES, NQ Chart
The ES had a 7591.00 to 7543.50 low Globex trading range with 255k ES traded and opened Friday’s regular session at 7547.75, down 51.75 points or -0.69%.
I usually work off a 5-minute chart, but in order to do the recap, I switched to a 30-minute chart. After the open, the ES traded to 7553.00. It then sold off 47.25 points down to 7505.75 at 10:00, rallied 27.75 points up to 7533.50, and sold off 47.25 points down to 7486.25 at 11:30. After trading 7490.50, the ES sold off 20.00 points down to 7470.50 at 12:00. It traded 7472.50, then sold off another 23.50 points down to 7449.00 at 12:30. From there, the ES rallied 28.75 points up to 7477.75 at 1:30, then dropped 48.25 points down to 7429.50 at 2:00. It traded 7435.75, sold off 26.50 points down to 7409.25 at 2:30, traded up to 7418.00, and then dropped 38.25 points down to 7379.75 at 3:00.
At that point, the ES was down 2.86% and the NQ was down 4.5%. After the low, the ES rallied 43.25 points up to 7423.00 at 3:30, traded 7412.25 as the 3:50 cash imbalance came in flat and then flipped to 4 billion to sell in the Nasdaq, and traded 7400.25 on the 4:00 cash close.
After 4:00, the ES sold off 41.25 points down to 7359.00 and settled at 7400.50, down 200.50 points or -2.64%. The NQ got demolished and settled at 29,026.50, down 1,461.75 or -4.79%, and traded a record volume of 1.007 million contracts. The YM settled at 39,936, down 735 points or -1.42%, and the RTY settled at 2,834.80, down 104.50 points or -3.56%.
In the end, the Anthropic blog post and Meta story saying they want to “raise tens of billions,” alongside U.S. officials discussing taking financial stakes in AI industry leaders—such as OpenAI CEO Sam Altman, who pitched the idea—only added to the fever-pitch carnage. In terms of the ES’s and NQ’s overall tone, it was the worst decline since the April 2025 tariff rout. The best word I can come up with is disaster.
Everything from Bitcoin to oil to bonds and stocks fell. Micron Technology (MU) fell 13.25%, Intel (INTC) fell 11.28%, Super Micro Computer (SMCI) fell 11.22%, and SanDisk (SNDK) lost 11.39%. Cisco (CSCO) fell 6.34%, and Nvidia (NVDA) dropped 6.20%. The declines erased more than $1.2 trillion in market value from the PHLX Semiconductor Index.
Equipment maker Caterpillar (CAT), which has become an AI play because of its power and energy business, fell 3.85%. July gold fell 3.11% down to 4,319.60, Bitcoin futures fell 5.14% down to 59,590, bond futures (ZBU26) fell 0.17 points to 111'24, or -0.47%, the 10-Yr notes (ZNU26) closed down 0.165 or -0.42%, and the 2-Yr note (ZTU26) closed down 0.063 or -0.19%, with its yield surging to 4.16%, its highest close in 16 months.
I am going to be honest: I have been very hesitant to say sell, get short, or liquidate because I don’t want to be wrong, but as I have always said, it won’t necessarily be my View or Lean that provides the roadmap—it’s the tone in which I write that you should understand. I think last Wednesday’s Mag 7 write-up was me trying to say... look at what’s going on with the market leaders or the top 25 stocks.
And while I admit I said I would buy a big gap down, I also pointed out the Anthropic story, and the lean and AI piece I did on the June week 1 expiration during a midterm election year was spot on. Did I personally benefit in my own trading? No, I didn’t, but that’s my fault, and I make no excuses about it.
The Week Ahead
Monday: No scheduled economic reports or Fed speak
Tuesday: 6:00 am NFIB Optimism Index, 8:30 am US Trade Balance, 10:00 am Existing Home Sales and Wholesale Inventories
Wednesday: 8:30 am CPI, 2:00 pm Monthly US Federal Budget and Oracle (ORCL)
Thursday: 8:30 am Initial Jobless Claims, PPI, and Adobe (ADBE) reports earnings after the close
Friday: 10:00 am Consumer Credit
Trey Oglesby - Swing Room
Watch Trey’s Market Recap and Forward view from last night. Well attended last night and is in the Swing room every Sunday at 5:30 pm preparing for the live Globex open:
Charts from the Trey’s Talk:
https://t2r4.com/uploads/2026/06/07/6-7-26_172000.pdf
From Jeff Hirsch - Stock Trader’s Almanac
June’s Seasonal Crossroads: Strong Recent Trends vs. Historical Midterm Weakness
June’s seasonal market patterns reveal an intriguing divergence between recent market behavior and longer-term historical patterns. The accompanying chart compares average June performance across major U.S. indexes during the last 31 years (1995–2025) against historical midterm-election years (1950–2022), highlighting a notable contrast in market tendencies.
Over the past three decades, June has generally been a constructive month for equities. NASDAQ stands out as the strongest performer, climbing steadily throughout most of the month and finishing with an average gain approaching 1.7%. Russell 2000 and Russell 1000 also show positive trajectories, ending June with gains of roughly 1.2% and 0.4%, respectively. Even the S&P 500 maintains a positive trend, DJIA remains near break-even but largely avoids significant weakness.
A key feature of the recent 31-year pattern appears to be resilience. After a modest pullback around the middle of the month, most indexes recover and strengthen into month-end. This suggests that investors may have historically used June weakness as a buying opportunity rather than a reason to reduce risk exposure.
The picture changes dramatically when examining midterm-election years. Across every major index, June has historically produced negative returns. Small-cap stocks have been particularly vulnerable. Russell 2000’s average performance deteriorates steadily throughout the month, ending around a 2% decline. Russell 1000 and NASDAQ also finish significantly lower, while S&P 500 and DJIA post meaningful losses as well.
This divergence reflects a broader market tendency surrounding U.S. midterm election cycles. Political uncertainty, shifting policy expectations, and heightened economic scrutiny often create a more cautious environment for investors. Historically, this has translated into weaker market performance during Q2 and Q3 of midterm years, with stronger seasonal tendencies often emerging later in Q4.
The stark contrast is difficult to ignore. Recent history suggests June has been a favorable month for stocks, particularly technology and growth-oriented sectors. However, the longer-term record of midterm-election years serves as a reminder that seasonal headwinds can emerge when political uncertainty increases.
As June progresses, investors may want to monitor whether the market follows the stronger modern trend or reverts to the more cautious historical midterm pattern. The answer could offer valuable clues about the market for the remainder of the year.
The 15:50 MOC opened with almost no real signal, showing a modest $262M buy imbalance across 689 symbols. That early transition looked balanced rather than aggressive, with both the dollar and symbol leans at +51.5%, suggesting rotation rather than a wholesale buy program. NYSE was stronger, however, showing a $1.247B buy imbalance and a notable +65.6% dollar lean, just shy of the +66% wholesale threshold.
The tone changed sharply after 15:52. Total imbalance flipped back and forth before sellers took control at 15:55, then accelerated into 15:56 and 15:57. The most important print came at 15:56, when the MOC hit a $3.74B sell imbalance with a -72.2% dollar lean. That is the clearest wholesale sell indication in the sequence. At 15:57, the sell pressure remained heavy at $3.389B with a -69.6% lean, confirming broad institutional supply before the imbalance moderated into the close. Th final 16:00 imbalance was still sell-side at $472M, with a -59.3% dollar lean and -53.6% symbol lean, more rotational than wholesale.
Sector action was highly split. Consumer Discretionary was the major drag, with a $731.55M sell imbalance and an extreme -80.6% dollar lean, led by AMZN and ROST on the sell side. Financials and Consumer Staples also leaned sell, while Industrials showed a small net sell despite large two-way activity. On the buy side, Health Care was the standout with $602.91M net buy and a +76.7% lean, joined by Energy at +79.2%. Technology was mixed: the sector leaned only +52.0%, but single-name demand was strong in MU, AMD, NVDA, MRVL, ORCL, and QCOM, while NXPI, CSCO, MSFT, AMAT, and TXN appeared on the sell list. Overall, this was a rotational close with pockets of wholesale selling, especially Nasdaq and Consumer Discretionary.
Technical Edge
Fair Values for June 8, 2026
SP: 9.66
NQ: 45.4
Dow: 54.64
Daily Breadth Data 📊
For Friday, June 5, 2026
• NYSE Breadth: 24% Upside Volume
• Nasdaq Breadth: 33% Upside Volume
• Total Breadth: 30% Upside Volume
• NYSE Advance/Decline: 30% Advance
• Nasdaq Advance/Decline: 23% Advance
• Total Advance/Decline: 26% Advance
• NYSE New Highs/New Lows: 76 / 97
• Nasdaq New Highs/New Lows: 138 / 290
• NYSE TRIN: 1.32
• Nasdaq TRIN: 0.60
Weekly Breadth Data 📈
For Week Ending June 5, 2026
• NYSE Breadth: 45% Upside Volume
• Nasdaq Breadth: 48% Upside Volume
• Total Breadth: 47% Upside Volume
• NYSE Advance/Decline: 38% Advance
• Nasdaq Advance/Decline: 30% Advance
• Total Advance/Decline: 33% Advance
• NYSE New Highs/New Lows: 285 / 201
• Nasdaq New Highs/New Lows: 854 / 484
• NYSE TRIN: 0.77
• Nasdaq TRIN: 0.48
BTS Levels - (Premium Only)
Today’s Important Economic Events
Polaris Trading Group Summary - Friday, June 5, 2026
Friday was a strong PTG process day: David identified the downside structure early, framed the session as a Capital Preservation Day, and the room focused on clean short-side execution, disciplined trade management, and lessons around respecting Cycle Day 1 weakness.
Market Prep and Morning Bias
David opened by noting that the overnight 7575 Line in the Sand had acted as firm resistance.
The lower projected 7545 target had already been tagged before RTH and was being retested.
The day was labeled Capital Preservation Day, setting the tone for patience and risk control.
David also identified the session as Cycle Day 1, with initial targets already fulfilled premarket.
Macro Backdrop
Jobs data came in strong enough to shift rate expectations.
The room noted traders were pricing in additional Fed tightening after the May jobs report.
Payroll revisions were higher, with March and April combined revised up by 93,000 jobs.
This macro backdrop added pressure to equities, especially growth and technology names.
Key Levels in Play
7575 Line in the Sand: firm overnight resistance.
7545 projected target: tagged before RTH.
7542 Put Wall: highlighted by David as a key level to watch.
Prior Low: David repeatedly noted bulls needed to reclaim and hold it.
D-Level: became a major actionable level during the morning.
Positive Trade Highlight: Open Range TRIFECTA Shorts
The standout trade of the day was the Open Range TRIFECTA short setup.
Around 10:04 a.m., David noted the shorts were “locked in with trade management.”
Around 10:10 a.m., the D-Level first target / prior low was fulfilled.
By 10:16 a.m., David confirmed the Open Range TRIFECTA shorts had all paid out.
This was the cleanest execution sequence of the session: short-side bias, defined levels, target fulfillment, and disciplined management.
D-Level Execution
The D-Level “struck again,” with members recognizing its value in real time.
Steve noted that the D-Level worked well even on the second hit.
David called it a “two’fer,” reinforcing the repeat opportunity.
Bruce shared that he uses audio alerts for the D-Level and enters in an “RSPR-ish” style.
The room discussed how to approach pullbacks, A4, MB levels, limit entries, and defined invalidation.
Teaching and Lessons
A major lesson was not to chase fast downside movement.
David emphasized that bulls needed to fully reclaim the prior low before the long side could gain traction.
The room discussed first pullbacks to A4, market balance levels, and RSPR-style setups.
DanV highlighted the importance of using a consistent risk process, even if entry styles differ.
The key takeaway was to trade the structure, not emotion.
Afternoon Selloff: Tech Wreck
The selloff accelerated sharply in the afternoon.
David reported QQQ down nearly 4%, later reaching about -4.5%.
SPX was down around 2%, later closer to -2.72%.
XLK was down roughly 6.70%, showing severe pressure in technology.
David emphasized that because XLK is such a large part of the S&P 500, weakness there can drag the broader index lower.
Cycle Day 1 Confirmation
David described the session as a textbook Cycle Day 1 decline.
The market continued probing for a low into the afternoon.
The day closed near the lower end of its range.
David connected the weakness back to prior PTG Daily Trade Strategy comments about a “crack in the pavement.”
Main Takeaways
Respect the day type: Capital Preservation Day meant risk control came first.
Respect the cycle: Cycle Day 1 favored downside continuation.
Do not fight structure: bulls needed a reclaim of prior lows, which failed.
Use levels for decisions: Line in the Sand, Put Wall, Prior Low, D-Level, A4, and MB levels all mattered.
The best trades came from patience, alignment, and management — not chasing.
Overall Summary
The room identified the bearish setup early.
The Open Range TRIFECTA shorts delivered the best positive trade sequence.
The D-Level provided another strong example of repeatable structure.
The afternoon confirmed the broader bearish thesis with a full technology-led selloff.
The day reinforced PTG’s core lesson: trade the framework, manage risk first, and let the levels do the work.
DTG Room Preview – Monday, June 8, 2026
Market Tone
US index futures are mixed, with Dow futures red while the S&P 500, Nasdaq, and Russell are modestly green.
The tone is indecisive ahead of major macro catalysts.
The US dollar has pushed to a two-month high as traders price in higher odds of a Fed rate hike.
Gold is down more than 1%, while Bitcoin is stabilizing after recent volatility.
Macro Drivers
Treasury yields rose after the May jobs report reinforced the idea that the Fed may need to hike, not cut.
Trump argued that a rate hike would be “wrong” and again called for a rate cut, adding political noise to Fed expectations.
The market is caught between data-driven rate-hike bets and political pressure for easing.
Geopolitical Risk
Iran and Israel traded missile attacks, ignoring calls to de-escalate.
Oil jumped more than $4, bringing inflation risk back into focus.
Middle East tensions weighed on global equities, with Japan’s Nikkei sharply lower.
Energy inflation and geopolitical headlines remain key intraday catalysts.
Tech and Crypto
Tech is under pressure as investors reassess stretched AI valuations.
Broadcom fell nearly 8%, dragging semis lower despite strong earnings.
Oracle and other mega-cap names also sold off.
Bitcoin briefly broke below $60,000 before stabilizing, adding pressure to speculative and high-beta assets.
Calendar
No major economic releases today.
No corporate earnings of interest today.
Tuesday morning earnings include J.M. Smucker.
Volatility and Flow
Volatility expanded sharply after Friday’s ES 200-point selloff.
The 5-day average daily range rose to 105.50 points from 64.75.
Whale bias leans bullish into the US open, though overnight large-trader volume was light.
ES Technicals
Friday’s selloff broke the ES through the key trendline supports.
Prior support trendlines are now acting as resistance on retests.
It remains unclear whether a short-term bottom is in place.
The 7355.50 swing low could be retested today.
The ES June contract rolls off this week, with fresh September contract trendlines starting next Monday.
Key ES Levels
Resistance: 7460/65, 7500/05, 7578/83, 7667/62, 7730/35
Loose support: 50-day MA near 7207.50
No active trendline supports are currently in play.
