Stops Above 7750, Buyers Below — The Pit Says Brace for the Whipsaw

It's Friday at 6:20 pm, and I want to finish the OP. I don't think there are any real patterns that work every time. Based on Friday making new highs into the cash close, one would think it's a positive sign, but as we all know, momentum trading just doesn't work like it did many years ago.

I think there are a lot of reasons for that, so here are a couple: the high levels of rotations and long oversold and overbought conditions.

Despite the Fed day rally and sell, it's also part relief. Now there is no doubt about the rate hike path.

My guess is that the news over the weekend about Iran being willing to return to negotiations with the U.S. helped support the ES rally on Thursday and Friday. The question now is whether the ES and NQ can continue higher today and, if so, how far they can go.

While traders remain hyper-focused on the war, the November 3 midterm election is now about six weeks away. Recent Reuters/Ipsos polling showed Democrats leading Republicans 44% to 37% on the generic congressional ballot, while President Trump’s approval rating stood at 35%, down from 47% immediately after his January 2025 inauguration. Whether developments in Iran materially change the midterm environment remains uncertain.

Our Lean: My guess is that we see higher prices on Globex and a gap-up open. Most of the recent gap-ups have either been sold on the open or after the first rally above the gap—a “double pump”—followed by buyers stepping in on the pullbacks.

I also think there is significant resistance around the 7750–7760 area, with what could be a large concentration of stops just above it. Another pattern I have noticed is what I call the “75s.” It seems like the algos have repeatedly used those areas as support and resistance.

Lastly, there may be another push toward negotiations to stop the war with Iran, but the geopolitical risks remain substantial. Reuters reported on September 20 that Iran’s military said it had intelligence suggesting an “imminent assault” by the U.S. and its allies and warned that it would retaliate against U.S. bases and regional partners. That remains an Iranian claim and is not independent confirmation that a new offensive has been ordered.

At the same time, the Houthis’ rapid advance along Yemen’s west coast has increased the threat to the Bab el-Mandeb shipping route and added to concerns about global oil supplies. Reuters reports that the Houthis have evolved into a heavily armed force with an estimated 350,000 fighters, according to a U.N. panel, and possess long-range ballistic missiles, cruise missiles, attack drones, anti-ship weapons, artillery, armored vehicles, and captured military equipment.

Bottom line: I expect another day of two-way trade. The upside remains in play, but with resistance overhead and the Middle East situation still highly fluid, traders should be prepared for sharp reversals in both directions.

MOC Recap: Nasdaq Buying Collides With Heavy NYSE Selling

Friday’s MOC developed into a sharp split between aggressive Nasdaq buying and broad NYSE selling. The imbalance initially showed a $1.2 billion buy at 3:49 ET and held near that level at 3:50, but the picture changed dramatically at 3:51. The market flipped to a $2.9 billion sell imbalance as $21.1 billion in sell orders overwhelmed $18.2 billion in buys. The all-market dollar lean was -53.6%, while the symbol lean was -58.0%, showing a meaningful sell bias but still largely rotational rather than wholesale liquidation.

The divergence underneath was striking. NYSE carried a $6.8 billion sell imbalance with a -64.7% dollar lean, while the S&P 500 showed $4.0 billion for sale. Nasdaq went the opposite direction, posting a $4.0 billion buy imbalance and a +62.3% dollar lean. By 4:00, the overall imbalance had reversed again to a sizable $3.8 billion buy as late orders hit the tape.

Technology was the clear destination for capital. Information Technology finished with a $2.9 billion net buy imbalance, including heavy buying in SNDK ($1.4 billion), AMD ($655.6 million), AAPL ($541.1 million), INTC ($537.9 million), TXN ($524.6 million), and CSCO ($408.5 million). Selling was concentrated in MSFT ($754.6 million), CRM ($403.5 million), APH ($400.6 million), and NOW ($345.5 million).

The strongest wholesale sector selling appeared in Communication Services at -90.2%, Basic Materials at -100.0%, Materials at -77.0%, Energy at -74.8%, and Financials at -72.8%. Financials carried a hefty $2.1 billion net sell, while Communication Services lost $1.9 billion and Health Care $1.5 billion. META ($767.4 million), GOOG ($580.0 million), XOM ($450.8 million), NEM ($350.3 million), GS ($323.2 million), and GE ($321.0 million) were among the largest individual sell imbalances.

The takeaway was rotation: money flowed aggressively toward Nasdaq technology while being pulled from financials, communications, health care, energy and materials.

How to read the MIM

How the NYSE and Nasdaq Auctions Work
How the NYSE and Nasdaq Auctions Work

BTS Levels - (Premium Only)

 

No SP500 companies with earnings announcements today.

Polaris Trading Group Summary Friday, September 18, 2026

Friday’s OPEX session reinforced two core PTG themes: preparation pays, and capital preservation matters just as much as trade execution. The overnight roadmap performed very well, while the regular session became more selective and eventually shifted into a capital-preservation posture.

Overnight and premarket performance

• The new session began as Cycle Day 1 on OPEX.

• The Daily Trade Strategy had outlined a 7735 third target, and price pushed higher overnight to fulfill it.

• The Cycle Day 1 Penetration Level at 7737.87 was also tagged precisely.

• David highlighted the strong performance of the DTS briefing and the value of having key levels mapped before the regular session.

Key market structure

• The primary Line in the Sand was 7695.

• David identified the active sandbox as roughly 7685–7695.

• Bulls needed to reclaim, clear, and convert 7695 into support to open the door to further upside.

• Bears were expected to resist that scenario.

• The room also discussed the importance of distinguishing dynamic information from static levels.

• David’s key teaching point was that dynamics, or momentum, supersede static levels when the two conflict.

Capital preservation became the priority

• By 11:02 AM, David officially called it a JAR, or capital-preservation day.

• Calls and puts were relatively balanced, reinforcing the lack of a strong directional edge.

• Rather than force trades in an unclear environment, the focus shifted toward protecting capital and waiting for higher-quality structure.

Positive trade of the day

• A BLT short around 7690.75 was noted late in the morning.

• That trade ultimately moved down toward the low of day.

• The trade was recognized positively in the room and served as an example of waiting for a qualified setup rather than chasing marginal opportunities.

Lessons learned

• Strong preparation does not mean traders must stay active all day.

• A well-defined roadmap can deliver excellent overnight targets while the regular session still offers limited edge.

• Trades should only receive capital when they meet strict structural criteria that have been researched and tested.

• David emphasized that PTG traders are speculators, not gamblers.

• Capital preservation is a valid trading decision when the market does not present sufficient opportunity.

• Patience for quality structure can be more valuable than increased trade frequency.

Overall takeaway

• The overnight DTS roadmap was highly effective, with both the 7735 target and the 7737.87 penetration level reached.

• The regular session required restraint and selectivity.

• The best lesson from the day was that disciplined traders do not confuse being prepared with being obligated to trade.