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Point A to Point B: Survive the Chop and Let the Seasonals Do the Heavy Lifting
Danny Riley
June 25, 2026
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There are lessons that we can all learn from the price action of the trade. The first one is that the algos create the two-way moves that we see in almost every market, and yesterday's ES and NQ moves were perfect examples. It's all about the “fake-outs.” If you can hold your own, you make money; if you get faked out and get out, well, you lose.
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Thoughts on the Yield Curve
When many think of the Yield curve, there are the beginner retail thoughts of ‘inversion = incoming recession possibilities’ and ‘steep curve = healthy economy’.
That is a rather basic view, but a view with which many are familiar.
We prefer to look at what the interest rate markets are generally pricing for a given time, in terms of yield (the cost of money over time), in relation to movement of other moments in time … in terms of yield. And think about how that relates to what we see in terms of our macro economic view (which, it is no secret by this point that we are in the structural inflationary camp)
Isn’t that the same thing? Isn’t an inversion in the yield curve nothing more than the cost of money in the near term, in relation to the cheaper ‘cost of money farther out in time’, in relation to each other?
Well, yes.
However, institutions don’t just look at whether the line is sloped up or down; we look at where the market is pricing friction and what structural forces are driving shifts across different tenors.
Take a look at the following Yield Curve on the SR3 product (90 Day SOFR Futures) ...
If you look closely at the orange curve representing June 24, 2026, you'll see a dynamic that completely scrambles the basic "inversion equals recession" narrative. Instead, it tells the vivid story of a market in flux, fighting the forces of structural inflation.
The Anatomy of the Hump
Right now, Fed Funds sits at 3.50%–3.75%. The front-end SR1N26 is pinned near that middle ground at 3.655% (96.345), showing the market expects the Fed to hold steady in the immediate term. But look at what happens just a bit further out: the SR1Z26 spikes to 4.00% (96.000).
When we transition into the 3-month SOFR futures (the SR3 packs starting at contract 1, SR3U2026, as shown on the x-axis), the curve aggressively steepens into a sharp "hump" by contract 3, peaking near 4.10%.
To a retail investor, a curve that rises sharply and then dips might look like a coding error. To an institutional player with a structural inflationary view, it makes perfect sense. Inflation isn't transitory, and the Fed was behind the curve for far too long. And is awakening to the possibility that this ‘new Fed’ … is possibly looking to correct past errors on it’s inflation policy.
What We See in the Change of the Shape of the Yield Curve
If the Fed is looking to change it’s policy in regards to inflation, and more aggresively fight inflation? Then the change makes total sense.
We have moved to higher rates … sooner: The market is pricing in the reality that the Fed will be forced to resume hiking. The cost of money over the next year must go up to combat sticky inflation. Importantly? Now the market believes this may be more of a reality. Thus, we see that the ‘hump’ towards higher yields is now greater, sooner, by the 3rd white term (the first quarter of 2027). This drives short-term yields higher, causing the sharp upward spike you see on the left of the orange line.
The Artificial Pivot (Green to the Blue Pack): The subsequent dip down toward 3.75% by the end of the green pack, beginning of the blue pack ( 11-13) … could be many things in reality. Economic damage from the hikes that have come too late in this cycle? Some would make that case. We see the merits of that argument? Or … a resumption of a healthy economy after inflation has finally been properly dealt with. Some would argue that case as well.
The Long-Term Reality (Blue Pack and Beyond): Look at the back end of the orange line (Beyond 13 on the axis). Honestly, we never try to read anything that far out in the curve. No real institutional players are making ‘macro’ bets out that far, and the liquidity has more to do with complex spread positions being made, and those contracts being used to brace off spread positions. Thus, everything at the end of the curve serving as what we refer to as ‘back-end hedge flow’.
The Institutional Takeaway
When you view the market through this lens, the curve isn't predicting a typical business-cycle recession. It’s mapping out a volatile macroeconomic environment where the Fed has been forced to admit it’s errors (that we have long pointed out) and front-load aggressive policy to address structural inflation.
The key question in our minds we keep asking ourselves?
Is it too late?
Again?
Until next time, stay safe, and trade well ...
Globex and Opening Session
The ES traded within a Globex range of 7420.25 to 7467.25 on a volume of 244k contracts. The regular session opened at 7447.50, up 0.17%.
Intraday Price Action
After the open, the ES experienced significant volatility:
During the morning session, after an initial drop to 7438.25, the market reached a session high of 7496.50 by 11:00, which was tested again at 11:30 before a reversal occurred. Into the afternoon, a sequence of lower highs led to a sell-off reaching 7407.00 by 1:30, and despite a brief rally to 7443.25, the ES hit a new daily low of 7404.25 at 3:10. Finally, at 3:50, a $5.3 billion buy imbalance was noted, and the ES traded at 7431.50 shortly before the 4:00 cash close, ultimately settling at 7428.25.
After-Hours and Settlement
Post-close, the ES rallied to 7482.25 following a record earnings beat and strong outlook from Micron Technology (MU). Final settlements for the day were as follows:
ES: 7477.50 (+0.54% / +40 points)
NQ: 30095.25 (+1.45% / +429.25 points)
YM: 52279 (+0.38% / +187 points)
RTY: 3013.50 (+0.51% / +15.30 points)
Market Summary
The session was characterized by two-way price action but concluded with a firm tone. Total volume for the ES reached 1.76 million contracts, consisting of 244k from Globex and 1.56 million during the regular session.
I am sorry for the way this looks, I use Gmail to write the OP, and there is an email formatting tool I must have hit. This is not at all the way it looked before I clicked on something, and no matter what I did, I could not get back to its original recap or my “In the end.”
Commodity and Crypto Overview
Honestly, I don't know where to begin other than to say “everything was moving.”
Bitcoin (BTU26) fell to 59885, a new low for 2026.
Crude oil (CLU26) dropped to its lowest level since 03/06/26.
Gold (GCU26) traded down to 3995.00, its lowest level since 09/26/25.
Below is a 1-month comparison chart of what I call the “3 Amigos,” and it doesn't look good for any of the three...
MiM
The MOC opened with a strong buy imbalance and initially carried a clear wholesale tone with an opening $5.16B buy imbalance. Buy dollars were $7.34B versus $2.18B to sell, producing a +77.1% dollar lean and +55.1% symbol lean across 690 names. That dollar lean was notable because it cleared the +66% threshold, indicating broad institutional buy demand rather than simple rotation.
The strongest early demand was concentrated in growth and large-cap technology. Nasdaq was the standout with a $3.36B net buy imbalance, $4.02B buy versus $662M sell, and an +85.9% dollar lean. The S&P 500 was also heavily bought at $4.98B net, with $6.87B buy versus $1.90B sell and a +78.4% dollar lean. NYSE was positive as well, but slightly less aggressive, with a $1.80B net buy imbalance and +68.6% dollar lean.
Sector flow confirmed the buy bias. Communication Services led with a +91.5% dollar lean, followed by Consumer Discretionary at +85.3%, Consumer Staples at +84.4%, Utilities at +82.1%, Information Technology at +81.4%, and Energy at +78.8%. These readings all suggested wholesale buy programs. Basic Materials showed a perfect +100% dollar and symbol lean, though only one symbol contributed, making it less representative.
On the symbol side, the largest buy imbalances were NVDA at $745.45M, GOOGL at $386.10M, AMD at $299.40M, TSLA at $267.56M, AVGO at $191.70M, MRVL at $166.67M, META at $161.26M, ORCL at $160.25M, AMAT at $146.28M, and LRCX at $135.85M. This showed a heavy semiconductor and mega-cap tech bid.
The sell side was more selective. TXN led sells at $119.19M, followed by SPGI, C, SNDK, WDC, MSTR, CRM, INTU, ACN, AMT, and MSFT. Financials were the weakest sector by symbol count, with a -56.4% symbol lean despite only a +51.7% dollar lean, making that area more rotational than wholesale. By 16:01, the imbalance flipped to -$434M, showing that the strong early buy program transitioned into late offsetting sell pressure into the final print.
Today’s Links:
Daily Breadth Data 📊
For Wednesday, June 24
• NYSE Breadth: 47% Upside Volume
• Nasdaq Breadth: 37% Upside Volume
• Total Breadth: 39% Upside Volume
• NYSE Advance/Decline: 54% Advance
• Nasdaq Advance/Decline: 48% Advance
• Total Advance/Decline: 50% Advance
• NYSE New Highs/New Lows: 117 / 83
• Nasdaq New Highs/New Lows: 245 / 280
• NYSE TRIN: 1.34
• Nasdaq TRIN: 1.60
Weekly Breadth Data 📈
For the Week Ending Thursday, June 18
• NYSE Breadth: 43% Upside Volume
• Nasdaq Breadth: 60% Upside Volume
• Total Breadth: 55% Upside Volume
• NYSE Advance/Decline: 46% Advance
• Nasdaq Advance/Decline: 52% Advance
• Total Advance/Decline: 50% Advance
• NYSE New Highs/New Lows: 273 / 127
• Nasdaq New Highs/New Lows: 609 / 395
• NYSE TRIN: 1.13
• Nasdaq TRIN: 0.72
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Today’s Economic Calendar
Earnings:
PTG Room Summary – For Wednesday, June 24
The day followed the Cycle Day 2 playbook closely: overnight targets were already fulfilled, the regular session began with balancing and consolidation, and the morning later produced a rally breakout before settling into a normal CD2 structure. The room combined trade execution, market structure discussion, and several useful lessons on discipline and risk management.
Opening Framework
David noted that both the upper and lower overnight target zones had been fulfilled from the DTS briefing.
The key context for the day was Cycle Day 2.
The expected theme was balance/consolidation, with the possibility of continuation if buyers could regain control.
Morning Education and Market Prep
Members asked questions about:
The overnight midpoint
The DMI Ratio
Market profile tools
How trend and structure should be read on the chart
David shared several resources and explained how these tools fit into the trading process.
The discussion emphasized preparation, context, and using objective references rather than guessing.
Positive Trade Development
The market followed the expected CD2 rhythm well.
David later summarized the morning as:
Early Cycle Day 2 balancing/consolidation
Followed by a continued rally breakout higher
This was the strongest positive trade theme of the session: traders who respected the consolidation phase and waited for confirmation had a clearer opportunity to participate in the upside breakout.
Risk Management Lessons
John B shared testing work around:
ATR7
89 EMA and 233 EMA envelopes
MAE/MFE analysis
Distribution profiling
One important finding was that giving stops more “breathing room” actually reduced performance in his testing.
The lesson was that wider stops are not automatically better; trade management decisions should be tested and measured.
Trading Psychology
The room discussed the difficulty of missing trades and the temptation to predict what the market “should” do.
A key lesson from the discussion was:
“Our brains want to predict rather than looking at the charts and executing.”
Another strong takeaway was:
“Trade what you see, verify what you know.”
The emphasis was on discipline, execution, and staying aligned with the chart instead of forcing bias.
Afternoon Wrap-Up
David described the afternoon as busy.
He closed by noting that the session produced a normal Cycle Day 2 balancing day.
The market held the Cycle Day 1 low and closed around the middle of the range.
David also flagged the next session as important because Cycle Day 3 would coincide with the PCE report, a key inflation metric watched by the Federal Reserve.
Main Takeaways
Cycle Day 2 expectations were respected.
Overnight targets had already been fulfilled before the main session.
The best positive opportunity came from the morning balance resolving into a rally breakout.
Risk management should be based on testing, not assumptions.
The day’s strongest lesson was to avoid prediction and execute what the chart confirms.
DTG Room Preview – Thursday, June 25
Market Tone
US futures are firmer, led by NQ strength after Micron’s strong earnings helped ease concern around the durability of the AI trade.
Cross-asset signals are cautiously constructive, with softer oil, lower VIX, and a firmer dollar.
Traders remain in “tech-up, macro-wait” mode ahead of key inflation data.
AI & Semiconductor Leadership
Micron’s blowout results are driving renewed confidence in the AI-memory cycle and lifting sentiment across semiconductors.
Qualcomm is adding breadth to the AI story as it highlights growth opportunities beyond smartphones, including auto, PCs, and edge AI.
Chips remain the key leadership group within tech this morning.
Macro Focus
The main catalyst is the Core PCE Price Index at 8:30am ET.
Other 8:30am ET releases include GDP, GDP Price Index, weekly jobless claims, durable goods orders, and personal income/spending.
NY Fed President John Williams speaks at 3:40pm ET.
Regulatory & Policy Risks
AI-related labor displacement concerns are back in focus after Cloudflare’s CEO warned about automation’s impact on jobs.
A proposed congressional bill targeting data-center energy costs adds a rising regulatory and cost-structure risk for hyperscalers and AI-infrastructure names.
ES Technicals
ES remains sideways, with trendlines not tested Wednesday.
Volatility remains elevated, with the ES 5-day average daily range unchanged at 102 points.
No meaningful whale bias, as overnight large-trader volume leaned bearish but was too light to be significant.
The 50-day MA at 7441.50 remains loose support after holding for two straight sessions.
Key ES Levels
Resistance: 7600/05, 7624/19, 7650/55, 7970/75
Support: 7238/23
