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They Cracked the Trap Door — Now Watch for the Short-Covering Rip
Danny Riley
June 24, 2026
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I speak to a lot of traders, and there is one common theme: the markets have been very hard to trade. I completely agree, and the main reason is that the levels of high-frequency trading (HFT), algorithmic trading, and AI bots have reached new all-time highs.
When I was doing the UBS program trading business in the S&P, there was always the notion that program trading went from 20% or 30% of the volume in the futures and NYSE and rose to 80%. However, after years of volume research, I think at its height it was closer to 60% to 65%.
My own belief is that a combination of three automated forces makes up the vast majority of today's volume. Here is what I came up with when I researched it:
If you want a single, unified view of a standard trading day measured out of 100% of total market volume, you can isolate these three forces based on their specific operational footprints. Because high-frequency market-making, institutional execution routing, and AI strategies overlap, their individual impact on the tape breaks down into these distinct, non-overlapping slices of the daily volume pie:
The Bottom Line Summary
If you combine all three automated categories (HFT + Basic Algos + AI), the grand total reveals that 75% to 80% of all daily trading volume is completely computerized.
When you look at the screen on a given day, roughly over half of the volume is the mechanical HFT middleman, one-fifth is predictive AI hunting for an edge, one-fifth is basic institutional routing software trying to stay hidden, and the small remaining sliver is actual human decision-making.
I have always thought that retail traders only made up a small portion of the volume over the last 10 years, but now we all know why everything from index futures to stocks, commodities, energy markets, and FX move so erratically and so quickly. My advice to traders is to embrace the BOT or die. Learn to read the patterns and go long when everyone is short, and sell when everyone is too long, because the BOTs are trained to know exactly when that remaining 15% is offsides.
Our Lean — Danny’s Trade (Premium only)
I posted in the IMPro room Monday night that things looked bad early in the session, and the Globex range was 7549.50 to 7421.75. The ES opened Tuesday's regular session at 7429.50, down 110.75 points, or -1.49%.
After the open, the ES traded 7435.50, sold off 20.00 points to 7415.50, and rallied 75.50 points up to 7491.00 at 10:15. It then sold off 55.25 points down to 7435.75 at 11:30, rallied 35.75 points to 7471.50, sold off down to 7460.75, and rallied up to 7475.25. After pulling back to the VWAP at 7460.50, it traded back up to 7476.50, sold off 47.75 points down to 7428.75, and rallied 23.50 points up to 7452.25.
From there, the ES sold off down to 7433.50 at 3:30, traded 7449.75, sold off down to 7436.25 at 3:48, and traded 7444.25 as the 3:50 cash imbalance showed $4.5 billion to buy. It rallied up to 7453.00, the imbalance flipped to $2.3 billion to sell, and the ES sold off down to 7431.50 and traded 7434.75 on the 4:00 cash close.
After 4:00, the ES traded back up to 7446.75 and settled at 7437.50, down 103.75 points, or -1.38%. The NQ settled at 29,666.00, down 987.50 points, or -3.22%; the YM settled at 52,082, down 37 points, or -0.07%; and the RTY settled at 2,998.20, down 25.90 points, or -0.86%.
In the end, it's very simple: "These are not our fathers' markets or charts, and nor will they ever be." There is simply no way to keep up with all the news and front-running. In terms of the ES and NQ's overall tone, they closed weak. When the South Korean Kospi fell 10%, it set off global selling in the tech and AI space. In terms of the ES's overall trade, volume was on the high side at 1.715 million contracts.
Guest Posts — Polaris Trading Group
🎯 Cycle Day 2 Expectations
🔄 The balance process begins
🎯 Range development starts to take shape
⚖️ Buyers and sellers square off for control
💥 Reversal potential quietly increases
In other words…
Cycle Day 1 established the key low
Cycle Day 2 installs the shock absorbers.
This is where the market says:
“Alright… everybody calm down… let’s figure this thing out.”
And for PTG traders?
That’s your cue to shift gears:
✔️ Less emotion
✔️ More structure
✔️ Cleaner, more deliberate opportunities
No need to force trades.
No need to chase moves.
Just stay patient… stay disciplined… and let the market come to you.
⚖️ Cycle Day 2 Objective: Balance… Consolidate…
Stay Patient.
Stay Disciplined.
Stay PTG.
🎯 Scenarios in Play
🟢 Bull Case — Buyers Stabilize & Reclaim
Acceptance Above: 7450 ±5
Upside Objectives
7465
7475
7490
This signals responsive buying evolving into initiative control.
⚠️ But remember:
This is recovery mode — not dominance yet.
🔴 Bear Case — Continued Rotation / Controlled Reset
Acceptance Below: 7450 ±5
Downside Objectives
7435
7425
7415
This is not panic selling —
This is an orderly distribution… the kind that grinds traders down.
📊 Key Reference Levels
PVA High Edge: 7468
PVA Low Edge: 7431
Prior POC: 7444
👉 Important:
These levels cluster tightly — forming a decision zone, not noise.
⚠️ 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.
ESU
— PTG
The MOC opened with a strong buy imbalance and quickly showed institutional demand, but the transition into the close was far less stable. At 15:50, the board showed a $1.06B buy imbalance, then expanded sharply at 15:51 to $3.72B, with $7.42B to buy versus $3.71B to sell. That early reading carried a dollar lean of +66.7%, which is notable because it pushed above the wholesale buy threshold, while the symbol lean was more moderate at +51.9%, showing that the dollars were more aggressive than the breadth.
The strongest buy pressure was concentrated in large-cap technology and semiconductor names. MU was the standout buy at $1.069B, followed by SNDK at $614M, NVDA at $443M, TSLA at $329M, META at $227M, AAPL at $200M, GOOG at $102M, and LRCX near $99M. Health Care also had support through LLY, while Financials saw selective buying in AXP.
On the sell side, pressure was also heavily technology-centered, which made the close more rotational beneath the headline. MSFT led the sell list at $277M, followed by INTC at $241M, ADI and TXN around $114M, KLAC near $100M, MPWR at $95M, MCHP at $95M, AMAT at $94M, and WDC at $84M. AMZN and C were also meaningful sell-side names outside pure semis.
Sector-wise, Basic Materials showed a full +100% dollar and symbol lean, but only one name, so the read is less broad. Utilities were strongly bought with +90.2% dollar lean and +71.4% symbol lean, a true wholesale sector buy. Health Care, Industrials, Energy, Real Estate, and Consumer Discretionary all leaned buy by dollars, with Health Care and Industrials above the 66% dollar threshold. However, Information Technology was dollar buy-leaning at +65.1% while symbol breadth was negative at -53.8%, confirming a split tape: large dollars buying select tech while many tech symbols were being sold.
By 15:56, the imbalance flipped to sell, reaching -$2.19B, and stayed negative into 16:01 at -$491M. The session opened as a strong buy program, but transitioned into a late rotational sell unwind.
Daily Market Recap - Tuesday, June 23
• NYSE Breadth: 51% Upside Volume
• Nasdaq Breadth: 68% Upside Volume
• Total Breadth: 67% Upside Volume
• NYSE Advance/Decline: 51% Advance
• Nasdaq Advance/Decline: 45% Advance
• Total Advance/Decline: 47% Advance
• NYSE New Highs/New Lows: 56 / 88
• Nasdaq New Highs/New Lows: 156 / 279
• NYSE TRIN: 1.15
• Nasdaq TRIN: 0.39
Weekly Breadth Data - Week ending Thursday, June 19
• NYSE Breadth: 43% Upside Volume
• Nasdaq Breadth: 60% Upside Volume
• Total Breadth: 55% Upside Volume
• NYSE Advance/Decline: 46% Advance
• Nasdaq Advance/Decline: 52% Advance
• Total Advance/Decline: 50% Advance
• NYSE New Highs/New Lows: 273 / 127
• Nasdaq New Highs/New Lows: 609 / 395
• NYSE TRIN: 1.13
• Nasdaq TRIN: 0.72
ES & NQ Futures trading levels (Premium only)
Polaris Trading Group Summary - Tuesday, June 23, 2026
The day began with David laying out the main references and confirming that the Cycle Day 1 projected STATX target at 7425 had already been fulfilled. The room then worked through an active morning built around pullback zones, midpoint confluence, buying tails, and block-volume confirmation, before the afternoon turned into a slow grind lower and the close featured a notable MOC imbalance flip.
Opening Framework
David opened with the key PTG links, strategy resources, and standard futures trading risk disclaimer.
The Cycle Day 1 projected STATX 7425 target was fulfilled before the regular session.
David posted updated visuals for:
Dynamic DLMB
NQ STATX, marked at 29686
Dynamic D-Level Money Box later in the morning
A major macro note was shared about potential end-of-Q2 rebalancing pressure, with large institutions possibly selling equities and rotating into bonds.
Morning Price Action
Early discussion centered on stop runs and how traders can get shaken out around obvious levels.
David identified a key pullback area of interest at 7440–7445.
Members noted the market was approaching important retracement levels.
The room discussed whether price was reclaiming last week’s midpoint.
David later marked 7482–7485 as an important area, tied to:
Overnight midpoint
Full-session midpoint
Additional VWAP confluence noted by Ram
Positive Trade Themes
The strongest constructive setup was the morning pullback sequence from the 7440–7445 area toward the 7482–7485 confluence zone.
The trade idea was supported by multiple pieces of context:
Pre-identified pullback zone
Retracement awareness
Overnight and full-session midpoint references
VWAP alignment
Buying tails on the 5-minute chart
Increasing block volume between 7470–7480
This was a good example of waiting for several forms of confirmation instead of relying on one level alone.
Key Teaching Moments
David highlighted the Dynamic D-Level Money Box with buying tails, helping the room see how buyers were responding around key areas.
Increasing block volume between 7470–7480 became an important read on participation.
Ram asked a strong question about when to define the first pullback after switching to A4 and breaking structure.
David’s explanation helped clarify how to think about:
Structure breaks
First pullbacks
Context after a regime shift
Avoiding premature trade entries
Afternoon Session
The afternoon became quieter and more directional to the downside.
David described the market as a slow grind lower.
He noted that a retest of the morning lows was on deck.
Dr. Dean asked about the ES open range, and David responded with an open range screenshot, reinforcing the importance of using session-defined references.
Closing Action
David reported an initial MOC buy imbalance of $5.1 billion.
He noted that the size was unlikely to scare the market.
The imbalance later flipped to a $2.3 billion sell imbalance, mostly in Nasdaq-related names.
By the final minutes, David noted that the MOC was getting paired off.
The lesson was clear: closing imbalances can change quickly, so traders should avoid overreacting to the first number.
Lessons Learned
Early stop runs are common and should be expected around obvious levels.
Pre-planned levels are more useful when combined with confirmation from structure, volume, and VWAP.
The 7440–7445 and 7482–7485 zones were useful examples of how David frames areas of interest.
Buying tails and block volume helped confirm buyer activity during the morning sequence.
Structure changes require patience; not every pullback after a break is automatically actionable.
MOC data is useful, but late-day imbalance numbers can flip and pair off quickly.
Discovery Trading Group Room Preview – Wednesday, June 24, 2026
Market Tone
US futures are slightly firmer, but sentiment remains cautious.
Traders are reassessing the durability of the AI trade.
Mega-cap tech remains under pressure, with Nasdaq weakness tied to concerns over stretched AI valuations.
Softer oil, a firmer dollar, and lower VIX suggest a market searching for direction rather than panicking.
Geopolitics & Macro Themes
Iran-related energy and shipping concerns remain in the background.
Markets are treating geopolitical headlines as secondary to tech-sector weakness.
Oil softness suggests traders expect supply disruptions to remain contained.
Supply-chain reshoring and de-globalization themes remain supportive for industrial and domestic-production names longer term.
Tech & Stock-Specific Headlines
Alphabet is set to replace Verizon in the Dow, which could trigger passive rebalancing flows.
The move may offer a modest sentiment boost to mega-cap tech.
Nvidia remains central to the AI narrative, with strong global chip demand and expansion into biomedical AI.
Export-control risks remain a near-term overhang for Nvidia and the broader AI trade.
Earnings & Economic Calendar
Premarket earnings: Paychex.
After the close: Micron and Jefferies.
Thursday morning: Darden, McCormick, and TD SYNNEX.
Economic data:
Current Account: 8:30am ET
New Home Sales: 10:00am ET
Crude Oil Inventories: 10:30am ET
ES Technicals
Volatility remains elevated but steady.
ES 5-day average daily range eased to 102 points.
No whale bias due to light overnight large-trader volume.
Trendlines were not in play Tuesday, giving both bulls and bears room today.
ES bounced from and continued to hold the 50-day MA at 7433.50, which remains loose support.
Key ES Levels
Resistance: 7560/65, 7620/25, 7630/25, 7945/50
Support: 7433.50 50-day MA, then 7235/30
