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The Pessimistic Bull
Danny Riley
April 08, 2026
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Well, a few of things come to mind. The first, and one of my rules, is that it takes days and weeks for the ES to go down and only one to bring it back. The second thing is, will the fighting actually stop, and the third, what's the deal on the Strait of Hormuz? Iran is saying ships have to pay a toll and need approval from Iran. Like oil expert Rev said:
IMPRO:Reverie:[7:54:38 PM]:
If you think Saudi Arabia and everyone else is going to be ok with Iran controlling their exports, I've got a bridge over the Strait of Hormuz to sell you.
IMPRO:Reverie:[7:55:41 PM]:
I don't think this is over by a long shot. We will know when we see boats entering the Gulf in big numbers, and the Gulf oil producers announcing they are bringing their production back online.
IMPRO:Reverie:[7:57:26 PM]:
What I fear is that this is only going to extend the oil export problem by another two weeks. All Iran wants to do is delay and drag this out, and they are exceedingly good at that historically.
IMPRO:Reverie:[7:57:58 PM]:
Are ships going to enter the Gulf risking being trapped there in the next couple of weeks? We'll see soon enough.
I have always said I am a bull market guy, and recently I said a pessimistic bull. Today I am somewhere in between. It was only 8 sessions ago on 3/30/26 that the ES traded down to 6359.50, and as of tonight's high, it is 6818.75, a 459.25 point rally or up 406 points in the last 7 sessions. Year to date, the ES is down 4.24%, down only 0.33% in the last week, and don 1.55% in one month.
Our Lean — Danny’s Trade (Premium only)
Market Recap
After the open, the ES traded 6619.25 and rallied up to 6639.00. It then sold off 57.5 points down to 6581.50 at 10:05, before rallying up to 6616.75 at 10:30. The ES sold off 44 points down to a new low at 6572.75 at 11:05, then rallied 28.25 points up to 6601.00 at 11:25 and pulled back to 6586.25. It rallied 46.75 points up to 6633.00 at 12:00, sold off to 6609.25, and then rallied up to 6631.75 at 1:00. After pulling back to 6617.25 at 1:25, the ES rallied 29.5 points up to 6646.75 at 1:35, sold off 50 points down to 6596.75 at 3:05, and then rallied 48.25 points up to 6645.00 as rumors of a two-week pause in the Middle East war hit the tape.
After the rip, the ES sold off down to 6622.00 until this headline hit: "White House Press Secretary Karoline Leavitt tells me: The President has been made aware of the proposal, and a response will come." The ES then rallied 33 points up to 6655.00, sold off down to 6638.50, and traded 6640.50 as the 3:50 cash imbalance showed $1.7 billion to buy. It rallied up to 6659.50 at 3:55 and traded 6660.25 on the 4:00 cash close.
After 4:00, the ES traded up to 6668.00 at 4:15, sold off down to 6653.75, traded up to 6673.50 at 4:42, and settled at 6656.75, up 5.75 points or +0.09%. The NQ settled at 24371.00, up 12.5 points or +0.05%; the YM settled at 46812, down 90 points or -0.19%; and the RTY settled at 2560.10, up 5.30 points or +0.21%.
In the end, the Lean was right, but the late headlines shifted the momentum. In terms of the ES and NQ’s overall tone, they acted spooked to me. In terms of the ES's overall trade, volume was higher at 1.94 million contracts traded.
I want to point something out: from February 26th, the first day of the "Operation Epic Fury" launch, to April 7, President Trump posted 390 to 430 posts on Truth Social—80 to 99 a week and 40 on April 7th alone.
I don't believe this is the art of the deal; it’s way too helter-skelter. It's 7:30 PM, and the ES just traded up to 6818.75 and is trading 6806, up 150 points or +2.3%, and guess what? Iran has been launching missiles at Israel and the UAE. Don't get me wrong, I am glad the ceasefire has been established, but it's the same question: will it hold?
There are no economic releases today, but at 1:05, San Francisco President Mary Daly speaks, and the Minutes of the Fed's March FOMC meeting will be released at 2:00.
Guest Posts
Guest Posts — Polaris Trading Group
🎯 Cycle Day 1 Focus
Scenarios for today’s trade
🟢 Bull Case — Buyers Stay in Control
Acceptance north of 6773 ±5
Upside objectives:
• 6772
• 6805
• 6821
🔴 Bear Case — Rotation / Reset
Acceptance south of 6773 ±5
Downside objectives:
• 6735
• 6700
• 6670
📊 Key Reference Levels
• PVA High Edge: 6794
• PVA Low Edge: 6650
• Prior POC: 6659
⚠️ Tactical Takeaway
Of course, nothing changes for PTG…Simply follow your plan. Take only Triple A setups and manage the $risk. ALWAYS HAVE HARD STOP-LOSSES in-place on the exchange.
PTG’s Primary Directive (PD) is to ALWAYS STAY IN ALIGNMENT with the DOMINANT FORCE.
S&P 500 (ES)
— PTG
MOC Recap
The Market-on-Close (MOC) session opened with immediate strength, transitioning quickly from a flat to an aggressively bid environment. At 15:50, the market showed a negligible imbalance (-$9M), but by 15:51, a sharp influx of buy programs hit, pushing net imbalance to +$3.14B. This set the tone early—this was not a gradual accumulation, but a decisive institutional bid.
From 15:51 through 15:55, the market maintained strong buy-side control, with total imbalances peaking near +$2.17B and buy percentages consistently in the mid-to-high 60% range. These readings (>+66%) signal broad, non-rotational accumulation rather than sector-specific repositioning. The participation count also remained elevated (~750+ symbols), reinforcing that this was a market-wide bid rather than isolated flows.
However, the transition phase began post-15:55. Buy pressure steadily declined from $3.7B to under $1B into the close, while sell pressure stabilized. By 16:00, the imbalance flipped to -$186M with a -54.8% lean—clearly a late unwind or counter-flow into the close.
Sector flows confirmed the early session strength was broadly distributed. Technology (+77.9%), Communication Services (+82.5%), and Energy (+74.6%) all showed strong buy-side dominance.
On the sell side, Financials (-65.3% #lean), Healthcare (-50.8%), and Utilities (-71.4%) stood out. Utilities in particular crossed the -66% threshold, indicating a more wholesale distribution rather than rotation. Financials were close to that threshold, suggesting persistent institutional selling pressure.
At the symbol level, the tape was led by mega-cap participation. AAPL (+$351M), NVDA (+$187M), and AVGO (+$71M) dominated the buy side, reinforcing the tech-led bid. Meanwhile, names like UNH and CVS contributed to healthcare weakness.
In summary, the MOC reflected a strong early institutional buy program that gradually faded, transitioning into a more balanced and slightly defensive close with selective sector liquidation.
Technical Edge
Fair Values for April 8, 2026:
SP: 38.19
NQ: 166.5
Dow: 205.12
Daily Breadth Data 📊
For Tuesday, April 7, 2026
• NYSE Breadth: 41% Upside Volume
• Nasdaq Breadth: 67% Upside Volume
• Total Breadth: 65% Upside Volume
• NYSE Advance/Decline: 48% Advance
• Nasdaq Advance/Decline: 44% Advance
• Total Advance/Decline: 46% Advance
• NYSE New Highs/New Lows: 45 / 45
• Nasdaq New Highs/New Lows: 84 / 149
• NYSE TRIN: 1.30
• Nasdaq TRIN: 0.38
Weekly Breadth Data 📈
For the week ending Thursday, April 2, 2026
• NYSE Breadth: 59% Upside Volume
• Nasdaq Breadth: 63% Upside Volume
• Total Breadth: 62% Upside Volume
• NYSE Advance/Decline: 75% Advance
• Nasdaq Advance/Decline: 73% Advance
• Total Advance/Decline: 74% Advance
• NYSE New Highs/New Lows: 151 / 305
• Nasdaq New Highs/New Lows: 191 / 734
• NYSE TRIN: 2.00
• Nasdaq TRIN: 1.53
ES & NQ Futures trading levels (Premium only)
Trading Room Summaries
Polaris Trading Group Summary - Tuesday, April 7, 2026
The session started with a positive tone right out of the gate. David was upbeat early, calling attention to both ES and NQ, signaling opportunity across indices. The room had a solid framework coming in with the DTS briefing and key levels already defined.
Morning Session – Structured and Technical
Focus early was on key levels and prior lows (~6596 area) and establishing context.
Traders were engaged and identifying levels together, reinforcing the importance of pre-market prep and reference points.
An A10 short setup triggered:
Hit Target 1 cleanly
Then moved to break-even
Good example of disciplined trade management — locking in partials and removing risk.
Midday – Key Level Respect + Intermarket Insight
6575 was clearly defined as “line in the sand” support.
Price retested and held this level multiple times, validating the plan.
This was the most important trade location of the day.
David emphasized intermarket relationships:
Crude dropping ~$3 while ES rallied
Reinforces the need to watch cross-market signals, not just ES in isolation.
Noon Balloon & Afternoon – Choppy but Controlled
Typical “Noon Balloon” behavior played out after support held.
Afternoon became:
Snappy, less smooth price action
Increased volatility due to macro uncertainty (POTUS deadline, geopolitical headlines)
David consistently reminded traders:
Conditions were not ideal for clean trend trades
Market was headline-driven and jittery
Late Day Context – Bigger Picture
Cycle Day 3 confirmed positive (92.27% stat)
→ Adds confidence to the broader directional bias.News flow intensified:
Geopolitical tensions (Iran, military movement)
White House updates
Result:
Unstable, reactive price action
Expectation set for a volatile Globex session
MOC Buy Imbalance: $1.7B
Signals underlying institutional buying pressure into the close
Overall Takeaways
Best Trade Location:
6575 support hold — clearly defined, respected, and tradable
Execution Highlights:
A10 short → T1 hit, risk removed
Good discipline across the room
Key Lessons:
Define and trust “line in the sand” levels
Use intermarket confirmation (Crude vs ES)
Adjust strategy in headline-driven, choppy conditions
Protect capital when conditions are not clean
Discovery Trading Group Room Preview – Wednesday, April 8, 2026
Markets are reacting to a proposed 2-week ceasefire between the US and Iran, centered on reopening the Strait of Hormuz. The deal—brokered with Pakistan—includes Iran allowing safe passage while the US pauses military escalation. This has significantly improved risk sentiment.
Market reaction:
Oil sharply lower (down $20+)
Risk assets (equities, crypto) surged
Gold higher, USD weaker (4-week low)
Volatility compressed, though overnight range expanded again on headlines
Despite the agreement, shipping traffic remains largely stalled, with ~800 vessels still trapped in the Gulf. Headlines remain fluid after last-minute escalation threats earlier.
Positioning / flow:
Whale bias: bullish into US open on strong overnight participation
Volatility regime still unstable → moving averages less reliable
Technical levels (ES):
Key shift: prior short-term downtrend resistance (6638/33) now acting as support
Price broke above 200-day (6787) and tested 50-day (6818) as resistance
Next major resistance: 6875/70s (intermediate trendline)
Higher resistance: 7190/95s
Support levels: 6638/33s, then 6240/35s
Other notes:
Focus today: Crude inventories, Fed Daly, FOMC Minutes
Earnings: DAL, RPM (pre); STZ (post)
Bottom line:
Geopolitical de-escalation has flipped sentiment risk-on, but price is approaching major resistance with plenty of room for bears to respond if momentum fades.
