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Time For A Reality Check
Danny Riley
September 09, 2025
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Our View
The ES did pretty much what I thought it would — it opened higher, rallied, pulled back, and then bounced again. That’s exactly what happened. The ES made a Globex high at 6516.50 and opened at 6504.00 on the 9:30 ET regular session, up 13.5 points. It sold off down to 6498.50 at 9:45, did a double pump back up to 6507, rallied to a lower high at 6508.00, and then puked down to 6495.25 at 10:18.
After that low, the ES rallied up to 6510.00, pulled back to the 6506 level, and then pushed up again to 6516.25 at 11:10. It sold off down to a 6509.50 “double bottom,” then rallied right back up to a 6516.25 double top at 11:33. From there, it sold off hard down to 6490.25 at 1:51, rallied back up to 6503.75, and then sold off down to 6491.25 before climbing again to 6503.75 at 3:45.
It traded 6503 as the 3:50 cash imbalance showed $3 billion to sell. The ES traded 6507.00 on the 4:00 cash close and settled at 6506.00, up 16.25 points or +0.25%. Meanwhile, the NQ closed at a new record high at 23,799.75, up 117.75 points or +0.49%, as the yield on the 10-year note fell to a five-month low at 4.04%.
In the end, they say the markets got “spooked” over continued job growth concerns and the hangover from the “Biden-era downward revisions” or “job adjustments” after Trump fired Erika McEntarfer, the Bureau of Labor Statistics (BLS) commissioner, on August 1, following her agency’s release of a weak jobs report that showed downward revisions to prior months’ job growth.
In terms of the ES’s overall tone, it sold off and again stayed weak until late in the day. In terms of the overall trade, volume was lower at 1.12 million contracts traded.
According to CME data, traders see close to a two-thirds probability that rates will be at 3.5% to 3.75% by the end of the year, which implies a quarter-point cut at each of the remaining three Fed meetings. There’s also a 9% chance that rates will fall a full point by year-end, or at least one large cut. I’m just going to say it like it is: what Trump wants, Trump gets — and the Fed is not fighting that train anymore.
Our View
This morning, the Bureau of Labor Statistics is due to release preliminary revisions to recent employment data as part of its annual process. There is no Fed speak scheduled today. Earnings are expected from Oracle, and it’s also Apple’s annual product launch event.
According to Bank of America:
"We're already seeing that play out with CPI inflation climbing to 2.7% in July from 2.3% in April, when some announced tariffs began kicking in. As each month has passed, existing pre-tariff inventory has dwindled, increasing the pressure on companies to either pass along some of the costs to buyers or see their profit shrink. Unfortunately, the situation didn't improve in August.
We forecast headline and core CPI rose by 0.3% m/m in July owing to rising energy prices, steady tariff-driven goods inflation, and firm non-housing services. We expect y/y headline CPI should rise from 2.7% to 2.9%, its highest since last July. Look for tariffs to continue to be slowly passed through to consumers. Tariffs should contribute to ongoing price increases in household furnishings, apparel, and recreation commodities. We expect tariffs to remain a source of goods price inflation over the next few quarters."
And JPMorgan’s Andrew Tyler added:
"We have concerns that the September 17 Fed meeting, which delivers a 25bp cut, could turn into a 'Sell the News' event as investors pull back to consider macro data, the Fed’s reaction function, potentially stretched positioning, a weaker corporate buyback bid, and waning participation from the retail investor."
So far, in the first five sessions of September, the 3:50 buy imbalances have totaled around $15 billion in stocks and ETFs bought. Yesterday's imbalance showed the first sell in six sessions — starting out at $1.7 billion to sell and growing to $3 billion — which caused only minimal selling. So far, it’s been fun and games in September, but it’s Fed reality check time. While I hope for the best, I think there’s reason to be concerned.
Our Lean — Danny’s Trade (Premium only)
MiM and Daily Recap
ES Futures Recap - Monday
The overnight Globex session on Sunday began with ES opening at 6483.75. Buyers pushed the contract to an early high of 6507.50 at 20:00, marking a 27.25‑point gain from the open. The advance was met with selling pressure, driving ES down to 6495.25 by 22:20, and then further to a lower low of 6493.75 at 00:50. From there, the contract recovered, rallying back to 6507.00 at 03:40. A higher high followed at 06:30 with a print of 6508.25, before prices dipped again to 6496.75 at 08:10. Just ahead of the cash open, ES touched 6509.00 at 09:30, completing the overnight session with a close at 6504.50, up 20.75 points or 0.32%. Globex volume was light at 134,673 contracts.
The regular session opened at 6504.50 and initially traded higher, reaching 6509.50 at 09:34. Momentum quickly stalled, and by 10:15 the contract had slipped to 6493.50. A brief rebound carried prices back to 6516.50 at 11:50, the day’s high and a 23.0‑point swing from the morning low. From that peak, ES sold off steadily, finding a higher low at 6495.75 around 12:55 but failing to sustain momentum. Another leg lower hit 6490.25 at 13:50, the regular session low. The afternoon trade was marked by back‑and‑forth action, with a failed rally to 6503.75 at 14:45, followed by a dip to 6491.25 at 15:10. Into the close, buyers regained modest control, lifting ES to settle at 6507.00, up 2.50 points or 0.04% from the open and 16 points from the previous close. Regular session volume was heavier at 932,308 contracts.
The cleanup session was uneventful, holding a narrow range between 6507.00 and 6508.50 before ending unchanged at 6507.00.
Across the full session, ES gained 23.25 points, closing at 6507.00, a 0.36% rise from the prior settlement. The cash‑to‑cash change measured +16.00 points, or +0.25%, marking a steady but modestly positive day.
Market tone reflected cautious optimism early on but faded into two‑sided trade. Bulls defended higher lows through much of the morning, but sellers capped rallies above 6515, signaling supply overhead. Volume was strongest during the cash hours, underscoring the tug‑of‑war between buyers and sellers.
The Market‑on‑Close imbalance data revealed a sell‑side skew. At 15:50, imbalances showed ‑$3.1B, with 78% of flow on the sell side and 57.7% of symbols leaning negative. The pressure kept a lid on late‑day recovery efforts and contributed to the choppy tape into the settlement.
Overall, the session closed with modest gains, but the late imbalance tilted sentiment bearish. With ES capped near 6515 and persistent supply into rallies, the market appears to be in a consolidation phase, awaiting stronger catalysts to break directionally. Traders will be watching whether buyers can defend 6490 support in the next session or if the sell imbalance foreshadows deeper retracement.
Technical Edge
Fair Values for September 9, 2025:
SP: 6.88
NQ: 31.02
Dow: 35.5
Daily Market Recap 📊
For Monday, September 8, 2025
NYSE Breadth: 46.91% Upside Volume
Nasdaq Breadth: 60.15% Upside Volume
Total Breadth: 58.65% Upside Volume
NYSE Advance/Decline: 54.95% Advance
Nasdaq Advance/Decline: 57.87% Advance
Total Advance/Decline: 56.76% Advance
NYSE New Highs/New Lows: 149 / 32
Nasdaq New Highs/New Lows: 319 / 101
NYSE TRIN: 1.24
Nasdaq TRIN: 0.90
Weekly Breadth Data 📈
For Week Ending Friday, September 5, 2025
NYSE Breadth: 51.72% Upside Volume
Nasdaq Breadth: 57.51% Upside Volume
Total Breadth: 55.33% Upside Volume
NYSE Advance/Decline: 59.69% Advance
Nasdaq Advance/Decline: 51.37% Advance
Total Advance/Decline: 54.45% Advance
NYSE New Highs/New Lows: 274 / 49
Nasdaq New Highs/New Lows: 442 / 264
NYSE TRIN: 1.35
Nasdaq TRIN: 0.76
ES & NQ Levels (Premium only)
Calendars
Economic Calendar
Today
Important Upcoming
Earnings
Trading Room Summaries
Polaris Trading Group Summary - Monday, September 8, 2025
Monday’s session in the PTG trading room, led by PTGDavid and with key trade insights from Manny, was marked by a clean early setup, chop through mid-morning, and tight range action into the close. Despite the lower volatility, members executed well within structure, with solid lessons and psychology strategies shared throughout the day.
Positive Trades & Setups
Early Win – Continuation Long Triggered:
Manny called the Continuation Long setup pre-market with entry around ES 6502–6504, and it triggered nicely around 8:35 AM, producing +3 then +7 points.
This was a strong, structured move based on solid delta and bid absorption signals.
PTGDavid later confirmed the 6515 target hit, in line with the Daily Trade Strategy briefing.
Globex Long – Discipline Highlight:
Manny noted he took the Globex long, chose not to chase further trades and waited for a higher-quality setup. Emphasized protecting profit and not giving in to impulse trading.
Bosier’s Afternoon Shorts:
Though initially cautious due to recent struggles, Bosier worked several short entries throughout midday:
Short from 12.75, scaled out at 10.75 and 8.75.
Another trade: Short 6.25, partial fills to 3.25, then flat at 10.25.
Repeated engagement in shorts around 7.25, 1.25, and again below 1.25 with exits posted.
Even with some trades not reaching targets, the process showed resilience and real-time learning.
Bruce F’s ATR4 Strategy:
Joined in short using a structured ATR strategy targeting 6490, reinforcing the use of pre-defined rule-based systems.
Market Structure & Commentary
Early Bullish Bias Confirmed:
The market responded well to the DTS plan calling for a bull scenario above 6480, targeting 6505–6515, which was fulfilled mid-morning.
Midday Consolidation:
Price capped at 6515 with backtests of 6508, leading to chop and more cautious trading.
David commented that the action aligned more with a Cycle Day 2 rhythm – slow, balanced, and choppy.
Late-Day Action:
The RTH range was tight, and even though 3x ATR was negative, price failed to expand much further.
MOC imbalance of $3 Billion sell hit into the close, with David reminding the room it's always absorbed, a common institutional pattern.
Lessons & Psychology Tools
Manny contributed excellent trading psychology frameworks today:
STP – Stop-Loss Protocol: Reset after loss with journaling and time away.
PWE – Post-Win Euphoria: Take a cool-down after a big win to avoid overtrading.
NRP – News Risk Protocol: Risk management during major data releases.
TTL – Two-Trigger Limit: Step back if two valid setups fail in the same direction.
Also emphasized was the importance of not trading out of boredom or readiness alone. Manny reminded traders that over-prepping can lead to impulsive trades at the open, and that discipline often comes from hard-earned experience.
Other Highlights
Useful tool shared: Synergy software for managing multiple computers with one mouse/keyboard.
Several fun moments and community engagement, including Bo’s warm welcome and some trading humor.
Key Takeaways
Structured setups like the early Continuation Long remain high-probability and should be prioritized.
Choppy environments call for patience, discipline, and smaller size or fewer trades.
Psychological awareness (post-win, post-loss, news) is as crucial as technical entries.
End-of-day order flow (like MOC imbalances) are often absorbed and not a directional signal on their own.
A thoughtful, patient day in the PTG room with early profits, respect for structure, and an emphasis on mindset management. A great start to the trading week.
Discovery Trading Group Room Preview – Tuesday, September 9, 2025
Markets & Fed Watch: US stock futures edge higher as traders await tomorrow’s PPI report and potential Fed rate cut next week. Volatility remains muted with light eco calendar today (NFIB Small Business Index).
Gold & Consumer Outlook: Gold hits new all-time highs, up 2.5% in two sessions on Fed cut hopes. Meanwhile, the NY Fed reports a record low in job confidence—only 44.9% expect to find work after a job loss.
Tech Spotlight: Apple’s annual fall event is today with expected reveals of iPhone 17, iPhone Air, new watches, and health-tracking AirPods. Analysts question if new hardware can drive significant sales.
Housing Market Trends: US housing value hits $55T (+55%) despite high mortgage rates. Gains are uneven—Northeast sees high demand; pandemic-boom states like CA, FL, TX lose billions. Mortgage rates near yearly lows post-jobs report.
Earnings Lineup: Premarket: Core & Main (CNM), NBIS. After hours: AVAV, GameStop (GME), Oracle (ORCL), RBRK, SNPS.
ES Technical Levels: ES remains within short/intermediate uptrend channels. No strong overnight whale bias. Key trendline levels: Resistance at 6721/26s, 6746/51s; Support at 6417/20s, 6391/94s, 5862/67s.
