It's going on 12:00, and for a good part of the early-day session the ES traded in a 10- to 12-point trading range and finally broke lower down to 7815.75 at 11:45, and then rallied 30.50 points up to 7846.25 at 11:50. I raised the question in the MTS chat about whether there was a possibility the futures could rally, and Rev in the MTS said: “Crude getting smoked today is certainly helping the stocks too.” The ES pulled back and rallied again after the 10-year note auction showed solid demand, even with the 10-year yield at its highest auction level since April 2025. I had lunch with the PitBull, and we talked about a lot of things, but the main discussion centered on the election and what happens if the Democrats win, whether the flow of immigration starts back up again in the U.S. and the risks that could create, the disconnect between the news and the markets, and leveraged and inverse ETF products that offer 2x or 3x daily exposure and must rebalance their positions, which can contribute to market pressure and intraday swings. We also talked about whether there will be enough liquidity if the markets really sell off hard, and the last topic was France and its economic woes. He also said he watches FOX News all the time and it only adds to his anxiety, but admitted he's addicted to it. Personally, I choose not to have the news on because there is never any good news, only bad. 

What I got out of the Fed minutes is as follows:

• Fed message remains hawkish.

• All members backed the 25 bp September hike.

• Most expect another hike by year-end.

• Inflation is still the Fed’s main concern.

• The labor market remains strong.

• Financial conditions are still seen as supportive of growth.

• Bottom line: higher for longer, with another hike still on the table.

Every Picture Tells A Story

I still think there are areas in the US that  are insulated from foreclosures and so far Delray Beach is one of them and the main reason is so many people moving out of New York are paying cash for their homes. While the foreclosure rate is miniscule compared to the 2007 Credit Crisis, they stand at the highest in 7 years. At its average, the 30 yr mortgage rates were high in 2007 at 6.34%. The only other higher rate and the highest was in 2023 when it reached 6.81% vs. where it is today at 7.46-7.55%.

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

The S&P 500 and Nasdaq pulled back from all-time highs. The 10-year Treasury bounced from session lows following a solid $39 billion auction today. FOMC minutes pointed to another rate hike, but offered no indication as to timing. The stronger dollar continued to pressure spot gold, which is trading around $4,100 at the time of writing. Bitcoin also fell and is trading around $83K.

Sector-wise, Memory (+1%) and Healthcare (XLV +1%) showed relative strength, while Semiconductors (SMH -1%) and Software (IGV -1%) showed relative weakness.

SPX traded within a 56 bps intraday range and closed at 7,802 (-0.2%). The volatility complex barely changed, with the VIX closing at a 15 handle and VVIX at 83.

The notable 0DTE structures of the day were 12K lots of put spreads around 7,715 and 8K lots of call spreads around 7,830. After these positions were established around 10:30 AM ET, S&P 500 HIRO gradually rose from roughly $0B to +$14B in cumulative delta, suggesting strong bullish options flow in the index. SPX subsequently bounced from our 7,765 Hedge Wall, ground higher toward 7,800, and then consolidated there into the close.

S&P 500 HIRO finished the day at +$12B delta, driven primarily by put selling (blue line). More than 80% of the put-selling flow came from 0DTE options (light blue line). This flow helped support the morning dip and pushed the market back above 7,800.

S&P Equities finished the day at +$2.4B delta, dominated by longer-dated call buying. The combination of index-level put selling and single-stock call buying pushed the correlation index (COR1M) back to 8, an extremely low level that we have been monitoring.

SPX fixed-strike vols were relatively flat on the day. SPX ATM IV is trading around 9%-10%, suggesting muted demand for SPX convexity. The key near-term catalysts to watch are CPI on 10/14 and the FOMC meeting on 10/28.

Yesterday, we flagged that MU 1-month implied volatility had reset to its lowest level. Today, the stock posted a large 8% intraday move, trading from a low near 1,000

Key Gamma Strike to a high near 1,100 Call Wall. The $78 intraday range was more than twice the roughly $29 move implied by the options market, and MU fixed-strike vols expanded by 2-3 vol points on the day.

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Globex: Overnight Weakness Set the Tone

Wednesday’s ES session opened at 7881.50 Tuesday evening and reached 7884.50 during the five-minute interval beginning at 8:45 p.m. ET. That was the full-session high. Buyers could not build on it, and the overnight trade worked lower into Wednesday’s cash opening.

Globex ranged from 7832.50 to 7884.50 and finished at 7837.50 ahead of the bell, down 44.00 points from its opening price. That left ES 36.50 points below Tuesday’s official settlement of 7874.00. Overnight volume was 262,415. The distinction mattered: this was a weak handoff to cash trade even though the later session would recover some ground.

Cash Trade: A Recovery, but Not a Full Repair

ES opened regular trade at 7837.50, pushed lower through the morning and reached 7815.75 in the five-minute interval beginning at 10:50 a.m. ET. The selling did not carry the market through that low. By the noon interval, ES had recovered to a 7842.25 close; the 2:00 p.m. interval finished at 7854.00.

The afternoon high was 7859.50 in the interval beginning at 3:00 p.m. The reported 3:50 p.m. snapshot was 7854.25. The last regular-session five-minute close was 7851.00, up 13.50 points from the cash opening but still 23.00 below Tuesday’s settlement. The separate instantaneous 4:00 p.m. snapshot was 7853.75.

The MIM showed a buy imbalance into the closing auction, but ES’s final regular interval closed below its opening price. A buy imbalance did not guarantee a higher closing price. Cleanup finished at 7850.25 by 5:00 p.m.; full-session volume totaled 1.347M, including 1.05M during regular trade. Official cleared volume was separately reported at 1.26M.

NQ also recovered from its regular-session low, closing regular trade at 31396.00 after opening at 31233.75. Its official settlement was 31402.25, down 81.00 points from Tuesday. Both contracts repaired part of the morning damage, but neither recovered its prior settlement. The useful lesson was to separate a tradable rebound from a complete recovery.

October 7 MOC: Big Buy Imbalance, Smaller Finish

The Reveal for the MOC yesterday was $3.7 billion to buy. Buyers briefly pushed the imbalance to $3.9 billion at 3:52 p.m., then it faded to $2.5 billion at 3:55 and $1.1 billion at 3:56. A small rebound at 3:59 gave way to a final $872.0 million buy imbalance. The 3:55 p.m. period through the close is usually discretionary traders closing out the day. Here, the buy imbalance shrank sharply, although buyers retained the dollar advantage.

The accompanying top-name tables showed WELL leading sellers at $79.5 million, followed by AMZN at $76.2 million, with TGT and IBM also on the sell side. NVDA led buyers at $525.7 million, followed by SPCX at $250.9 million and AAPL at $220.9 million. MU, AMD, AVGO, INTC, and LRCX reinforced the semiconductor theme. Buying clustered around chips and technology; selling was more scattered across real estate, retail and services.

The sector snapshot carried the same message: technology dominated with $2.3 billion net buying. Health care, financials and utilities added support, while staples, industrials and real estate leaned to sell. Financials had positive dollars but more selling symbols, showing that dollar strength did not always mean broad participation.

Overall, the flow feels cautiously supportive, with conviction fading into the finish. Buyers kept the upper hand in dollars, but most of the Reveal disappeared before the final reading. The stronger bullish case would need demand to broaden beyond the technology leaders and hold up in the next session.

Economic Calendar

Earnings Calendar

Polaris Trading Group

Polaris Trading Group’s October 7 session centered on Cycle Day 2 balancing and consolidation. David began with the overnight retreat toward 7845 and watched the prior Cycle Day 1 low at 7829 for a possible retest. The day’s focus shifted from early support to repairing the selloff.

Balance and the recovery

• The early trading zone was 7820–7830. David cited a 78-point average Cycle Day 2 range, a historical reference rather than a guaranteed daily move.

• The room discussed a DLMB long with the prior low as its first target. A later member reported both targets hit; that was a room-reported result.

• As price recovered, David’s next objectives were clearing and converting the opening range, then 7850.

Afternoon decision zone

• David reported that price had repaired half the lost ground. Holding above 7855–7860 was his condition for further repair and potential pressure on shorts.

• Failure to push higher could bring sellers back. Late in the session, 7855 remained his line in the sand for the final hour.

• The recurring risk message was to stay flexible, use stops and trade only aligned setups.

DTG Room Preview

The DTG group is watching crude, Treasury yields, and the dollar for a potentially choppy October 8 session. Its preview favors flexibility around headline-driven moves and continued attention to semiconductor leadership versus rate-sensitive sectors.

Opening catalysts

• PepsiCo reports before the opening bell; initial jobless claims are scheduled for 8:30 a.m. ET.

• DTG is watching the interaction between energy moves, yields, and index futures rather than treating the macro backdrop as a one-way trade.

• The group reports no meaningful overnight large-trader bias because its observed volume was too light to support one.

ES references

• The group identifies 7807–7812 as the nearby trend-channel support zone, with 7692–7697 and 7410–7415 farther below.

• Its intermediate channel resistance is 8000–8005.

• DTG cites 7766.25 as its 50-day moving-average reference and potential loose support. These are the group’s chart references, separate from the BTS calculation.

Charts