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Too High to Buy, Too Firm to Sell: Welcome to the August Meat Grinder
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The historical stats have worked perfectly so far for August.
Typical seasonal pattern:
Trading days 1–4: Generally bullish.
Trading days 5–10: Momentum begins to fade.
Middle of August: Choppy with a downside bias.
Second half of August: Historically weaker and more vulnerable to sharp selloffs.
Late August into September: One of the market’s most difficult seasonal periods.
Our Lean — Danny’s Trade (Premium only)
The ES traded in a 7631.00 to 7666.00 Globex trading range, with 210k contracts traded, and opened Tuesday’s 9:30 ET regular session at 7657.50, up 26.50 points, or +0.35%.
After the open, the ES traded 7656.00, rallied 50.25 points up to 7706.25 at 10:15, sold off 13.50 points down to 7692.75 at 10:30. It then rallied 28.50 points up to 7721.25 at 11:00, pulled back to 7715.75, rallied 61.50 points up to 7777.25 at 2:30, pulled back to 7766.00, rallied 17 points up to a new high at 7783.00 at 3:20. After the high, the ES sold off 10 points down to 7773.00, rallied up to 7786.00, and traded 7780.75 as the 3:50 cash imbalance showed $7.5 billion to sell. The ES sold off down to 7763.25 at 3:57 and traded 7764.00 on the 4:00 cash close.
After 4:00, the ES traded down to 7761.00 and settled at 7774.00, up 145.75 points, or +1.91%; the NQ settled at 29818.25, up 926.50 points, or +3.21%; the YM settled at 54628, up 934 points, or +1.65%; and the RTY settled at 3047.90, up 56.60 points, or +1.96% on the day.
In the end, it’s been a 4-day buy fest backed by the Iran peace deal talks, Japan-U.S. yen intervention, strong earnings, falling oil prices, and lower Treasury yields.
In terms of the ES’s overall tone, all the indices were firm, with little to no pullbacks. In terms of the ES’s overall trade, volume was 1.595 million contracts traded.
From the July 30 low of 7331.00 to the August 4 high of 7786.00, the ES rallied 455 points, or +6.21%.
From the July 30 low of 27202.00 to the August 4 high of 29956.50, the NQ rallied 2754.50 points, or +10.13%.
From the July 30 low of 51732 to the August 4 high of 54423, the YM rallied 2691 points, or +5.20%.
From the July 30 low of 2905.60 to the August 4 high of 3051.80, the RTY rallied 146.20 points, or +5.03%.
S&P 500 (ES)
****NEW**** PTG Trading Room Recordings
We are now recording the PTG Trading Room Morning Session. These will be “raw” unedited and possibly lengthy. While watching, adjusting the playback speed is recommended. You will be able to find the most recent five (5) session recordings here: Polaris Trading Group Videos
Note: Trading Room RECAP archives link: PTG-RECAP
🎯 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 @ 7629
*****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: 7760 ±5
Upside Objectives
7785
7805
7815
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: 7760 ±5
Downside Objectives
7735
7725
7715
This is not panic selling —
This is orderly distribution… the kind that grinds traders down.
📊 Key Reference Levels
PVA High Edge: 7786
PVA Low Edge: 7715
Prior POC: 7774
Cycle Day 1 Low: 7629
👉 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.
ES
— PTG
The MOC opened with a forceful $7.5B sell imbalance, built from $3.1B of buy interest against $10.7B of sell interest. The dollar lean was -77.3%, clearly a wholesale sell signal, while the symbol lean was only -53.4%. That split showed that the pressure was concentrated in large-dollar names rather than spread evenly across the market.
The S&P 500 carried an $8.2B sell imbalance with an -83.8% dollar lean, while Nasdaq showed $7.7B to sell and an extreme -93.9% lean. NYSE was the exception, holding a modest $161.8M buy imbalance with a rotational +51.6% dollar lean.
The imbalance improved quickly, narrowing to $6.3B at 15:52 and $3.4B at 15:53 as buy interest climbed to $4.6B. Selling then rebuilt to $5.2B at 15:54 before easing steadily to just $1.5B at 15:57. A late sell wave pushed the imbalance back to $3.9B at 15:59, followed by a final reduction to $2.4B at 16:00. Symbol leans repeatedly rotated around the 50% area, reinforcing that this was concentrated selling rather than universal liquidation.
Communication Services carried the heaviest sector pressure, posting a $5.1B sell imbalance with a -98.6% dollar lean. Information Technology followed at $2.3B and -90.6%. Consumer Discretionary was wholesale offered at -75.1%, while Health Care registered -68.5%. Basic Materials showed -100.0%, although that represented only one symbol.
Real Estate provided the clearest wholesale sector buy at +69.5%. Industrials produced the largest positive imbalance at $561.2M with a +64.9% lean.
EA dominated the sell list at $4.8B, followed by MU, NVDA, MSFT, TSLA, RTX, AAPL, AMZN, AVGO, AMD and SNDK. FERG led buyers at $936.2M, followed by SHW, WELL, GS, WFC, CHTR, C, AXP, AMAT and HLT.
Daily Market Recap
For Tuesday, August 4, 2026
NYSE Breadth: 69% Upside Volume
Nasdaq Breadth: 82% Upside Volume
Total Breadth: 78% Upside Volume
NYSE Advance/Decline: 67% Advance
Nasdaq Advance/Decline: 75% Advance
Total Advance/Decline: 72% Advance
NYSE New Highs/New Lows: 135 / 32
Nasdaq New Highs/New Lows: 341 / 85
NYSE TRIN: 0.91
Nasdaq TRIN: 0.62
Weekly Breadth Data
For the week ending Friday, July 31, 2026
NYSE Breadth: 53% Upside Volume
Nasdaq Breadth: 56% Upside Volume
Total Breadth: 55% Upside Volume
NYSE Advance/Decline: 54% Advance
Nasdaq Advance/Decline: 52% Advance
Total Advance/Decline: 53% Advance
NYSE New Highs/New Lows: 286 / 189
Nasdaq New Highs/New Lows: 468 / 692
NYSE TRIN: 1.05
Nasdaq TRIN: 0.83
ES & NQ Futures trading levels (Premium only)
Polaris Trading Group Summary - Tuesday, August 4, 2026
Tuesday developed into a powerful upside session in the equity-index futures. David guided the room through a series of successfully completed targets while emphasizing discipline, emotional control, and the importance of avoiding late-stage FOMO.
Market Development
The session began with a bullish tone following the prior Cycle Day 3.
Traders initially discussed the possibility of two-way trade and consolidation.
ES quickly moved through the 7675 target.
The market continued higher and reached the Cycle Day 1 Upper Penetration Extreme at 7692.
Continued call buying supported the upside momentum.
ES later reached the gamma-derived one-standard-deviation level near 7715.
NQ and ES produced strong opening-range moves.
NQ ultimately reached its three-day cycle target at 29,667.50.
ES continued toward its Cycle Day 1 range projection of 7730.65.
Successful Targets and Positive Trades
ES 7675 target was fulfilled and exceeded.
ES 7692 Cycle Day 1 Upper Penetration Extreme was reached.
ES 7715 one-standard-deviation gamma target was achieved.
NQ reached its three-day cycle target at 29,667.50.
The opening-range setups in both ES and NQ produced strong directional opportunities.
The day developed into a super cycle, defined by the room as a move greater than 150% of the standard projection.
Super Cycle Conditions
The market expanded well beyond its normal projected range.
The room discussed how a failed prior cycle can increase the probability of a larger follow-through move.
Strong call buying and negative gamma helped accelerate the advance.
Momentum remained dominant through much of the session.
Trading Psychology
David repeatedly stressed the need to remain emotionally neutral and process-driven.
Focus on the process, not the outcome.
Remain dispassionate while managing trades.
Do not allow an open position to distort market objectivity.
Wait for confirmation rather than anticipating.
Accept that good trading should often feel repetitive or boring.
Use probability and structure instead of emotion.
Avoid becoming attached to a market opinion.
Quote of the Day
“Convert Eff-It into Effort.”
The message was to replace frustration, impulsiveness, or resignation with disciplined execution and continued effort.
FOMO and Market Sentiment
As the rally extended, David became increasingly cautious.
Short-dated index call demand remained extremely strong.
Market sentiment rapidly shifted from fear to neutral and then greed.
David warned that the market was returning to a FOMO-chasing environment.
Momentum panic, negative gamma, and call-buying euphoria were driving prices higher.
Traders were reminded not to chase after multiple upside targets had already been completed.
End-of-Day Reversal
A reported $6.5 billion market-on-close sell imbalance appeared late in the session.
Larger participants sold into the price strength.
Buyers disappeared during the final minutes.
The market experienced a sharp late-day pullback.
Despite the selloff, the S&P 500 still closed at its first record high since June.
Key Lessons
Follow confirmed direction rather than predicting every turn.
Respect cycle targets and range projections.
Use the 89 EMA and fair-value-zone structure as decision-support tools.
Recognize when a normal cycle has become a super cycle.
Do not confuse strong momentum with a low-risk entry.
Avoid chasing after the move is already extended.
Monitor options activity and gamma conditions.
Pay close attention to market-on-close imbalances.
Maintain discipline even when the market appears euphoric.
Strong trend days can still reverse sharply near the close.
Discovery Trading Group Room Preview – Wednesday, August 5, 2026
Market Tone
US stock futures are firmer as crude oil extends its two-day decline and geopolitical pressure around the Strait of Hormuz eases.
Lower oil prices are reducing inflation concerns and supporting rate-sensitive sectors.
ES and NQ enter the session with a constructive bias, although markets remain highly sensitive to geopolitical headlines.
Any renewed escalation or disruption to shipping lanes could quickly reverse the improvement in sentiment.
Oil, Rates, and FX
The decline in crude is lowering the risk of a more hawkish Federal Reserve response.
Transportation, manufacturing, and consumer-related sectors are benefiting from lower energy costs.
A steadier Japanese yen is helping reduce volatility in global carry trades.
A softer US dollar would support technology and industrial stocks, while renewed dollar strength could tighten financial conditions.
Technology and Semiconductors
Semiconductors remain a key driver for the Nasdaq as AI-related capital spending continues to accelerate.
AMD reported strong revenue and data-center growth, but the stock reaction reflects concerns about valuation and margin durability.
Chip-sector momentum will be an important intraday signal for NQ.
AI security concerns may create additional volatility in high-beta software and mega-cap technology names.
ES Technical Outlook
Tuesday’s rally pushed ES to a new all-time high.
The five-day average daily range increased to 146.75 points, signaling elevated volatility.
Volatility could contract today unless fresh bearish geopolitical or political headlines emerge.
Large-trader positioning is leaning bearish ahead of the ADP employment report.
Key ES Levels
Resistance: 7620–7623
Major resistance: 7858–7863
Initial support: 7615–7620
Additional support: 7440–7445
Lower support: 7310–7315
Major lower support: 7130–7135
50-day moving average: 7542.50
The former intermediate-term downtrend channel near 7615–7620 is the main support area to watch on a pullback. The next major trendline resistance is near 7858–7863.
Economic Calendar
8:15 a.m. ET: ADP Non-Farm Employment Change
9:45 a.m. ET: S&P Global Services PMI
10:00 a.m. ET: ISM Services PMI
10:30 a.m. ET: Crude Oil Inventories
Earnings Before the Open
CVS Health
Eli Lilly
Walt Disney
Uber Technologies
Kraft Heinz
Honda Motor
Phillips 66
Earnings After the Close
Cloudflare
DoorDash
eBay
Expedia
MercadoLibre
Occidental Petroleum
Roku
Bottom Line
The broader market backdrop is constructive due to lower oil prices, easing geopolitical pressure, and renewed semiconductor strength.
ES remains extended after Tuesday’s breakout, leaving room for profit-taking or consolidation.
The main near-term catalysts are the ADP report, services data, oil inventories, and geopolitical headlines.