Markets Remain Unfazed by the News Cycles

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The ES traded in an 18-point range for a good portion of the day, following the weakness in the NQ. When the NQ would go bid, the ES would go for the ride, but when it did, the NQ would go offered, and the ES would grudgingly follow. At 2:06 pm the ES made a new low at 6118.25 when the NQ was also making new lows. I thought it was due to a headline, but it turned out to be a low-volume stop run.

Throughout the day, it seemed like there was some type of rotation out of the NQ. but after the low, I told the room that everyone was short. Another one of my trading rules is what I call The Three Parts of the Trading Day:

1. What happens on Globex

2. What happens after the 9:30 open

3. What happens in the last hour

Yesterday was a perfect example of this!

We live in interesting times—right now, the ES seems unfazed by just about everything being thrown at it… the bond market, the ineffectiveness of the Fed, tariff wars, DeepSeek, inflation… you name it. But, as I’ve always said, the S&P tends to take bad news and make good of it. You could see it in the VIX, which traded down to 15.35 late in the day after being above 15.90 earlier. There seems to be zero fear.

As of the close, the ES is up over 4% YTD. It reminds me of a hurricane, it’s not a matter of if it’s going to strike, it’s when. My concern right now is how quiet it is. It reminds me of 2018, when the futures kept pushing higher while the VIX remained suppressed. The PitBull lost $25 million getting out of his short options position and set off “Volpocalypse”. I don’t care what anyone says, after the PitBull got out the LJM fund started covering simultaneously on the CME and the CBOE. It was a bloodbath, and I had a firsthand look at what started it.

I’m not saying history is about to repeat itself, but this happened in February 2018 so it is stuck in my head. I don’t even think the PitBull fully knows the chain reaction, but I know the Chicago prop firms that took the other side of his 25,000 puts did. When LJM started to get out the market makers were told not to take on any size, and that’s how LJM lost $800 million in 24 hours.