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- The Bulls Had Their Chances. Then 7810.50 Gave Way.
The Bulls Had Their Chances. Then 7810.50 Gave Way.
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Our View
Yesterday’s ES trade did what weak markets often do: it gave the bulls several chances to take control and they could not do it. The ES opened the regular session at 7823.50, failed to reclaim the 7830.75 bull/bear line, broke 7810.50, and eventually traded down to 7758.75 before closing the cash session at 7773.75. That put the ES down 57.25 points from Tuesday’s cash close, with nearly 1.3 million contracts traded during the regular session.
What stands out to me is that this was not just a quick flush and recovery. Once the ES lost 7810.50, the selling persisted and the 7773.00 BTS lower-range target was eventually reached. The market even pushed 14.25 points through it before stabilizing. That tells me yesterday’s decline had more behind it than a simple stop run.
The bigger issue remains interest rates. Treasury yields are still elevated, with the 10-year recently trading near 5%, and the market continues to wrestle with the idea that the Fed may not be finished tightening. Earlier this week, the 10-year yield was around 4.96%, while the 30-year was above 5.29%. When yields stay this high, they put pressure on equity valuations, particularly the high-multiple technology names that have carried the Nasdaq.
Oil is the other piece of the puzzle. Crude has backed off its recent highs, which is a positive from an inflation standpoint. Lower oil reduces some of the pressure on inflation expectations and, in theory, should help bonds and stocks. The problem is that bonds have not responded strongly enough yet. That leaves the ES and NQ vulnerable every time yields start pushing higher again.
Today, we also have another potential catalyst from the labor market. Initial jobless claims are scheduled for 8:30 a.m. ET, with expectations around 201,000 after last week’s 196,000 reading. At this stage, I think the market reaction matters more than the number itself. A stronger-than-expected labor reading could reinforce the higher-for-longer rate story and push yields higher. A softer number could give bonds some relief and potentially spark an equity bounce.
So what are we watching? First, I want to see whether yesterday’s 7758.75 low holds. If the ES starts accepting below that level, I would expect sellers to remain in control and look for another downside extension. On the upside, the first thing the bulls need to do is reclaim yesterday’s late-day breakdown area around 7773-7780, and then start rebuilding above 7810.50.
The main tell today may not even be the ES itself. Watch the 10-year yield, crude oil, and the NQ. If yields move lower and the NQ starts leading, the ES can squeeze. If yields push back toward their highs and yesterday’s ES low breaks, I think the path of least resistance remains lower.
Our lean: My approach is to let the first move develop rather than chase it. Yesterday proved that once the important levels break and the market accepts below them, the better trade can be staying with the move rather than trying to pick the bottom.
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Stocks and bonds traded lower amid rising crude oil prices (+3%). The yield on the 10-year Treasury reached 5.1%, its highest level since July 2007. Meanwhile, the dollar climbed against all major currencies, and spot gold fell below $4,300.
Sector-wise, the software sector (IGV +1%) outperformed, while Semiconductors (SOXX -1%) and Memory (DRAM -3%) pulled back. The key catalyst to watch is Meta Connect 2026 tonight at 7:00 PM ET, which could be the make-or-break point for the data center/AI trade.
The SPX traded within an 86bps intraday range and closed at 7,706 (-0.8%), remaining above our Risk Pivot of 7,690. Volatility woke up, with the VIX rising 7% to close at 15, and the VVIX climbing 7% to close at 89.
The 0DTE positioning was relatively light on the day, but it’s notable that customer put selling positions around the 7,700 zone were trimmed as the market moved lower. As a result, the heatmap around that area turned to negative Gamma (red) by the end of the session.
S&P 500 HIRO registered -$20B in Delta on the day, the largest negative reading in the past year. Although most of the flow was 0DTE, the spread between non-0DTE puts and 0DTE puts was $2B, suggesting some hedging demand as the market pulled back from its all-time highs.
Single-stock HIRO saw -$4.5B in Delta on the day, dominated by -$2.5B in longer-dated call selling (orange line) and -$2B in put buying (blue line). Because we noticed traders adding single-stock calls over the past two days, the unwind of these calls, combined with new put buying, led to increased selling pressure from market makers.
SPX fixed-strike vols were relatively flat despite the selloff, suggesting the options market has not yet priced in sustained volatility ahead.
One of our Opening Setup winners of the day was SPCX puts. A 6K lot of SPCX October 145 puts was notable ahead of another SPCX lockup expiration tomorrow. The stock fell 4% on the day to close at 148, and these puts gained 56%.
SPCX has a Low Volatility Point at 145, which aligns with peak positive dealer gamma and could be a key gamma level to watch.
From a volatility surface perspective, SPCX at-the-money (ATM) IV has reset to its lowest level in the past 3 months, as the stock has been consolidating around the 150 Key Gamma Strike for the past 4 weeks.
The mixed catalysts of a Nasdaq weight rebalance and the lockup expiration could create some volatility ahead, and we will continue to watch gamma levels for potential options trades.
Market Recap
The ES traded in a 7818.75 to 7843.25 Globex trading range and opened Wednesday’s regular session at 7823.50, down 7.50 points, or -0.10% from Tuesday’s 4:00 close.
The overnight trade revolved around the 7830.75 BTS bull/bear line. ES initially traded on both sides of the pivot and rallied to a Globex high of 7843.25 at 2:40 a.m., but it never reached the 7848.50 upside resistance. By the time the cash session approached, ES had fallen back below 7830.75, keeping the bearish BTS setup intact.
After the 9:30 open, the selling accelerated quickly. The ES traded up to only 7826.25 on the opening bar and then headed lower. At 9:45, it broke the 7810.50 BTS support, dropping to 7805.00. That break confirmed the bearish setup and put the 7773.00 lower range target squarely in play.
The ES continued to grind lower through the morning and finally reached the 7773.00 lower range target shortly after 12:40 p.m. Rather than stopping there, the sell program accelerated, pushing ES down to the regular-session low of 7758.75 at 1:00 p.m. That was 67.50 points below the opening-session high and 72.00 points below the 7830.75 bull/bear line. The next BTS downside level at 7718.50 was never reached.
From the 7758.75 low, the ES bounced back above 7773.00 several times, but the recovery never developed into anything substantial. The market spent much of the afternoon chopping around the lower range target, with 7773.00 acting as both support and resistance as buyers and sellers fought for control.
Late in the day, the ES was trading around 7775.00 before another sharp selloff hit during the 3:50 bar, driving the futures down to 7761.00. The ES then bounced during the final five minutes and finished the regular session at 7773.75.
After 4:00, the ES traded between 7770.25 and 7774.75 and finished the full CME session at 7772.75. The full-session range was 7843.25 to 7758.75, an 84.50-point range, with approximately 1.49 million contracts traded.
From a BTS Levels standpoint, Wednesday was a good example of the levels laying out the roadmap before the move. The first trading idea was the failure to reclaim and hold above the 7830.75 bull/bear line. Once the cash session opened below that pivot, the bearish bias remained intact. The second—and more important—signal came when ES broke 7810.50 at 9:45. That breakdown opened the path directly toward the 7773.00 lower range target, which was reached around 12:40.
The 7773.00 target then became the key level for the rest of the session. ES overshot it by 14.25 points to 7758.75, but sellers could not extend the decline toward the next major BTS support at 7718.50. Instead, the market repeatedly rotated around 7773.00 into the close.
In the end, the BTS bearish setup played out almost exactly as outlined: ES remained below the 7830.75 bull/bear line, broke 7810.50, and reached the 7773.00 lower range target. Bulls never regained control, while sellers came up short of extending the move to 7718.50. The result was a strong downside session followed by afternoon consolidation around the lower range target.
MiM
MOC Recap: Heavy Sell Program Hits the Tape
The MOC opened with a decisive sell program and the first major reading showed a $4.7 billion sell imbalance, with $1.5 billion to buy against $6.2 billion for sale. The dollar lean was -80.5%, well beyond the -66% threshold that signals broad institutional selling rather than normal rotation. Symbol breadth was less extreme at -60.7%, with 269 stocks to buy versus 416 to sell.
Selling intensified into 3:55, when the imbalance peaked near $5.3 billion to sell as sell orders reached $6.6 billion. From there, the pressure steadily moderated. The imbalance improved to $2.4 billion at 3:56, $2.0 billion at 3:58, and $1.4 billion at 3:59 before finishing around $1.1 billion to sell at 4:00. Despite that late reduction, the closing flow remained overwhelmingly sell-side, with the final dollar lean at -78.4% and symbol lean at -76.8%.
The sector board showed just how broad the liquidation was. Information Technology led the selling with a massive $1.6 billion net sell imbalance and a -82.7% dollar lean. Financials followed at $661.2 million to sell, Health Care $527.9 million, Consumer Discretionary $441.7 million, Communication Services $367.8 million, Energy $323.9 million, and Industrials $279.9 million. Materials and Utilities were particularly one-sided at -93.1% and -92.1%, respectively. Real Estate was the lone meaningful buy sector at $21.1 million, with a +56.6% lean.
At the symbol level, the largest sell imbalances were NVDA at $396.4 million, META $342.9 million, MSFT $267.9 million, LRCX $202.1 million, AMZN $197.4 million, and AMD $176.2 million. JPM, CVX, AAPL, LLY, and BRK.B also showed sizable selling.
The buy side was led by GOOG at $101.9 million, SNDK $87.9 million, CAT $75.0 million. and MU $62.0 million, followed by MSTR, WBD, PWR, TSLA, MCD, and CRWD. Overall, this was not a rotational MOC—the extreme dollar leans and widespread sector selling point to a wholesale sell program, even though a significant portion of the imbalance paired off during the final minutes.
Daily Breadth Data 📊
For Wednesday, September 23, 2026
NYSE Breadth: 24% Upside Volume
Nasdaq Breadth: 35% Upside Volume
Total Breadth: 31% Upside Volume
NYSE Advance/Decline: 21% Advance
Nasdaq Advance/Decline: 24% Advance
Total Advance/Decline: 23% Advance
NYSE New Highs/New Lows: 27 / 367
Nasdaq New Highs/New Lows: 82 / 427
NYSE TRIN: 0.82
Nasdaq TRIN: 0.59
Weekly Breadth Data 📈
For the Week Ending Friday, September 18, 2026
NYSE Breadth: 39% Upside Volume
Nasdaq Breadth: 55% Upside Volume
Total Breadth: 49% Upside Volume
NYSE Advance/Decline: 29% Advance
Nasdaq Advance/Decline: 38% Advance
Total Advance/Decline: 35% Advance
NYSE New Highs/New Lows: 115 / 554
Nasdaq New Highs/New Lows: 255 / 803
NYSE TRIN: 0.63
Nasdaq TRIN: 0.50
Today’s Economic Calendar
PTG Room Summary – For Wednesday, September 23, 2026
Wednesday’s session developed into a textbook Cycle Day 1 decline, with David’s downside roadmap unfolding progressively throughout the day. Early weakness below the 7835 Line in the Sand established bearish acceptance, and price ultimately completed the full historical average decline into the 7765 handle. The session offered a strong example of allowing the cycle structure and predefined targets to guide expectations rather than trying to anticipate a reversal too early.
Early Session Setup
The day began as a new Cycle Day 1 with 7835 identified as the key Line in the Sand.
Overnight action had nearly tested both sides of the initial projections: 7845 above with a 7843 high, and 7815 below with price reaching the 7819 area.
David confirmed an “official” CD1 decline early in the session, with the key question becoming how deeply the decline would extend.
The primary bearish framework called for acceptance below 7835 ±5, with downside objectives at 7825, 7815, and 7805.
Bear Case Delivers
The market established bearish acceptance below the key 7835 area and worked methodically through the downside objectives.
By 9:49 AM, the 7805 target had been fulfilled, validating the early Bear Case roadmap.
Rather than immediately reversing after reaching the initial targets, sellers maintained control and extended the Cycle Day 1 decline.
David subsequently identified 7782 as the Volatility Trigger, providing another important reference as the decline matured.
Key Support Zone and Two-Way Trade
By mid-morning, price had reached a significant confluence zone containing the Cycle Day 1 Violation Level, Volatility Trigger, 3-Day Central Pivot, and nearby CD1 Average Decline.
With multiple references converging in the same area, David shifted expectations toward increased two-way traffic.
This was an important adjustment: a strong directional move does not mean conditions will remain one-directional throughout the session.
Room members noted that some automated setups missed portions of the initial move, reinforcing the value of patience rather than chasing a trade after the opportunity has passed.
Full Cycle Day 1 Decline
Selling resumed and ultimately extended substantially beyond the early 7805 objective.
By early afternoon, price had fulfilled the Cycle Day 1 Average Range Decline projection into the 7765 handle.
The 7765 area also coincided with the critical 50% retracement of Monday’s rally, making it an important decision point for buyers.
David characterized this area as a key moment for the bulls, but price remained in the lower quartile of the daily range heading toward the close.
The result was a full tiered Cycle Day 1 decline that fulfilled the historical average downside projections.
Lessons From the Session
The 7835 Line in the Sand provided a clear framework: acceptance below it favored the bearish rotation/reset scenario rather than an immediate bullish recovery.
Predefined targets mattered. The market progressed through 7825, 7815 and 7805 before eventually completing the much deeper average CD1 decline around 7765.
Confluence areas should change expectations. When price reached the Violation Level, Volatility Trigger, Central Pivot and average-decline zone, David appropriately shifted from expecting straightforward continuation to expecting two-way traffic.
Missing an initial move does not justify chasing it. Several comments about systems “missing the party” highlighted an important discipline lesson: another structured opportunity is preferable to forcing a late entry.
The “Be the Jellyfish” reminder fit the session well—remain flexible and respond to what price is actually doing rather than becoming attached to an earlier expectation.
Heading into Cycle Day 2, David cautioned that additional downside spillover remained possible. Conversely, an initial rally could create an early fade and eventual retest of the CD1 low.
Closing Perspective
Cycle Day 1 finished as a strong example of the PTG methodology working through a complete decline structure.
The bearish roadmap below 7835 produced the anticipated lower targets and ultimately reached the historical average decline around 7765.
Price remained near the lower portion of the day's range late in the session, while David also noted the pressure associated with the 10-year yield being above 5%.
A reported $4.7 billion MOC sell imbalance provided another bearish element into the close.
The primary takeaway was to trust the cycle framework while remaining adaptable: establish the directional hypothesis, use predefined levels for confirmation and objectives, and adjust expectations as price reaches important areas of confluence.
DTG Room Preview – For Thursday, September 24, 2026
Macro backdrop
Bonds remain shaky as markets digest higher global yields, while oil has eased from recent highs on improving trade and peace-talk sentiment.
The U.S.–China trade truce has reportedly been extended by two months, helping reduce near-term tariff uncertainty and supporting risk appetite.
Xi’s U.S. visit is adding optimism around incremental trade progress, though headline risk remains elevated.
Gold is holding its recent pullback while the U.S. dollar trades near a two-month high.
Hot PMI data is keeping additional rate hikes in focus, leaving U.S. indexes highly sensitive to Treasury yields and rate-related headlines.
AI and tech
Meta’s new Muse AI agent and its planned transaction-fee model are adding to enthusiasm around the company’s AI ecosystem and hardware ambitions.
Meta’s broader push toward next-generation AI interfaces could help keep AI and megacap tech in leadership.
Reports that an OpenAI agent hacked an Australian government website and contacted officials afterward are raising fresh concerns around AI autonomy, cybersecurity, and regulation.
Any new governance headlines could quickly impact sentiment across AI-heavy software and megacap names.
Today’s catalysts
Treasury yield behavior remains a key driver for U.S. indexes.
U.S.–China trade headlines from Xi’s visit could move industrials, semiconductors, and other cyclical sectors.
AI regulation and governance remain an emerging volatility catalyst.
Softer crude offers some relief on inflation pressure, but the strong dollar and rate-hike expectations remain headwinds.
Markets remain highly headline-driven, with active sector rotation and elevated sensitivity across asset classes.
Earnings
Premarket: Darden Restaurants (DRI), TD SYNNEX (SNX)
After the bell: Costco (COST)
Economic calendar
8:30am ET: Weekly Unemployment Claims
8:30am ET: Current Account
8:30am ET: Richmond Fed President Thomas Barkin speaks
8:50am ET: Cleveland Fed President Beth Hammack speaks
10:00am ET: New Home Sales
10:10am ET: Philly Fed President Anna Paulson speaks
ES setup
Volatility picked back up Wednesday as ES erased all of Monday’s U.S. session gains.
The ES 5-day average daily range fell to 82.25 points from 93.00 on Tuesday.
Geopolitical developments involving Iran, Ukraine, Israel, the West Bank, and President Trump’s social media posts remain potential volatility events.
Whale bias is divergent bullish into the U.S. open, with elevated overnight large-trader volume.
ES tested its former short-term downtrend channel top and initially found support there.
Overnight, ES is retesting that trendline, with it still unclear whether the move is a probe or the start of another leg lower.
The short-term ES trend remains bearish following Monday’s 7847.25 swing high.
The 50-day moving average at 7717.50 is back in play as loose support.
Key ES levels
Potential resistance: 7840/35, 7965/70
Potential support: 7755/50, 7608/13, 7537/32, 7407/12
