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Was It a One-Day Shakeout? Not With This Many Sell Stops Below
Danny Riley
June 04, 2026
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The markets had a good sell-off, and everything the talking heads have been saying about a correction is lining up. But has the correction really started, or is this just the markets finally starting to pull back after 9 weeks of higher closes?
Yes, the bond and note yields rose, but the ZBM25 (June bonds) made a low at 109.16 on 5/28 and closed at 112.19, down 14 points, or -0.39%, while the DXY (Dollar Index) settled at 99.53, up 31 points, or +0.31%.
I think with the markets up so much, they are digesting the fact that Trump never had a deal with Iran and that renewed fighting is breaking out. Despite Trump's aides saying he will not start an all-out war, it is really not in his control. What it looks like to me, after three Middle East ceasefires, is that renewed fighting is more likely than not.
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Dan @ GTC Traders
Still Short the Bonds … Still Long the Indices … BUT ...
We have made no secret of both our macro stance, and our trades as of late.
All of us are quite aware that we have been stuck within a structural inflationary regime (structural inflation differs from just ‘inflation’) since 2022. That’s four years. We have been warning of this since 2023, and our thoughts have both been spelled out in this space, as well as all over our X stream. And again, we want to stress that structural inflation differs from simple ‘inflationary outbursts’ onto the macroeconomic landscape.
This ‘call’ (we hate that word) has become so painfully accurate to anyone with a brain, we barely need to defend it. Sticky Inflation (differing from simply Core or CPI) measures have been higher than any point since the middle of 2008 …
We stated that actions by the Federal Reserve to cut rates throughout 2024 … were wrong. That the Fed was bowing to political and populist pressures, and too early to the cut cycle. That inflation risked reigniting, as structural inflation become more deeply embedded. We even went so far as to nearly ‘predict’ (we also hate that word) each ‘flare up’ of inflation for the last 12 months.
Following this thought process, our thesis for the last few months has been that Financial Conditions are far too loose.
We stated in this space on April 23, 2026 …
“When policy is restrictive, markets take even the smallest bad news poorly. When policy is loose, markets brush off even catastrophic news.”
That is exactly what we are witnessing.
The system has been told, implicitly and explicitly …
7,000 plus … Go Like Hell.
Liquidity is abundant. Risk is tolerated. Bad news is discounted. The marginal buyer is not focused on deteriorating fundamentals, but on the availability of capital and the expectation of continued accommodation.”
We have made no secret on the X stream and elsewhere, that in one of our models we are long the Nasdaq and other Indices. And that accompanied with this inflationary regime, we are short prices on the long-end of the Treasury curve since March in another model.
And what have we seen in the Indices, including the Nasdaq?
A move that is nearly straight up, and as explosive as a move as you could ever hope for in Indices. And an inverse, risk-on move in the long end of the curve … where we are short since March.
All well and good. Nice victory lap.
Now what?
Well, a good trade is nothing, without an exit and good trade management.
Just ask any Bitcoin bag-holder.
For the model (Model No. 1 in our Quad Program) that is long the Nasdaq? We are going to stay long the Nasdaq for the entirety of the month of June and review various metrics come the end of the month. But we will be willing to hedge up that position if a multi-day high failure sets itself up. We are evaluating that on a day by day basis our portfolio review we release most days at the GTC Traders Premium Service, and specify when we feel that time has come.
For the model (Model No. 4 in our Quad Program) that is short the bonds?
On the September contract of the Bonds (ZBU2026) we are heavily watching the 112’25’s region (On TLT, that would be the $85.85 region). With sustained and strong trading above that region with conviction (important qualifier there) … we would look to end that short against the long end. If we do not trade above the 112’25’s with conviction and instead begin to trade below the 111’31’s with conviction? We will just stay with our short position.
Again ... great trades are nothing without good trade management, and an exit strategy.
And the above is ours.
Until next time, stay safe, and trade well ...
The ES traded in another narrow Globex trading range from 7628.50 to 7602.00 and opened Wednesday's regular trading session at 7608.50, down 15 points, or -0.20%.
After the open, the ES traded up to 7614.75, dropped 22.75 points down to 7592.00, upticked to 7594.75, and then sold off 20.75 points down to 7574.00 at 9:50. From there, it rallied 23.25 points up to 7597.25 at 10:35, slowly sold off 34.75 points down to 7562.50 at 12:40, and rallied up to 7578.75 at 1:05.
It then sold off down to a higher low at 7567.00 at 1:15, rallied 18.00 points up to 7585.00 at 1:57, pulled back to 7577.25, and rallied up to 7588.00 at 2:32.
The market then sold off down to 7573.50 at 3:30, rallied 8.50 points up to 7582.00, and traded 7581.50 as the 3:50 imbalance showed $2.7 billion to sell. It sold off down to 7568.50 at 3:59 and traded 7572.50 on the 4:00 cash close.
After 4:00, the ES sold off down to 7552.50 at 4:15. After Broadcom (AVGO) earnings, it rallied back up to 7565.00, sold off down to a new low at 7543.00 at 4:40, and settled at 7547.50, down 76.00 points, or -1.0%, on the day.
The other indices followed suit:
NQ settled at 30,495.00, down 217.75 points, or -0.71%.
YM settled at 50,760.00, down 640 points, or -1.25%.
RTY settled at 2,891.30, down 44.77 points, or -1.52%.
In the end, the markets were long overdue for a sell-off/pullback. Higher bond yields and surging crude oil prices, combined with a low VIX and struggling gold prices, all added to the weakness—especially as the ADP number unexpectedly added 122k jobs in May.
In terms of the ES and NQ's overall tone, they were weak from the get-go; after a brief uptick on the open, every rally was sold. In terms of the ES's overall trade, volume was higher but not massive, with 1.3 million contracts traded.
If anyone is surprised by the sell-off, they shouldn't be. The ES was up 9 weeks in a row, the NQ and YM were up 8 of the last 9, and all three indices were sitting on new all-time contract highs. Crude was up, while bonds and gold were down.
I don’t have a lot to write today, but I am going to post a 5-day chart of the Roundhill Magnificent Seven ETF (MAGS), which has been down 4 sessions in a row for a total loss of 3.24%, or $836 million in transaction volume value.
MiM
The June 3 MOC opened with a $1.095B net sell imbalance with $3.141B to buy against $4.235B to sell. From there, the MOC remained heavy throughout the closing window, expanding to a peak sell imbalance near $3.788B at 15:55 and still closing deeply negative at 16:00 with a $3.068B net sell imbalance. The late 16:01 update eased to $1.970B to sell, but the tone stayed firmly defensive.
The market-wide lean at 15:51 was -57.4% by dollars and -55.0% by symbols, which is sell-biased but still more rotational than wholesale. The NASDAQ showed the strongest early pressure among the major groups, with a -61.4% dollar lean, while NYSE and S&P 500 were both near -54% dollar lean. By 16:00 the dollar lean deteriorated to -82.2%, and by 16:01 it reached -86.0%, which moved the auction into clear wholesale sell territory.
Sector action was highly split. Utilities were the standout sell sector, with a -94.2% dollar lean and -88.9% symbol lean, a major wholesale sell signal. Financials were also aggressively offered at -72.0% dollars and -65.7% symbols. Real Estate, Communication Services, Health Care, and Information Technology were all negative, with Technology carrying the largest dollar sell imbalance at -$395.62M.
On the buy side, Basic Materials showed a clean +100% lean, though only on one symbol. Consumer Staples posted a strong +72.0% dollar lean, Consumer Discretionary was +74.7%, and Energy was right at the notable threshold with +66.1%.
Single-name sell pressure was led by MRVL, AAPL, V, GOOGL, BRK.B, AMD, AMAT, CSCO, BA, GOOG, and ON. Buy demand was concentrated in NVDA, PLTR, MSFT, MU, VZ, TJX, BAC, TSLA, MO, and INTU. Overall, the MOC transitioned from a small buy open into a broad, late-session institutional sell program, with the strongest pressure in Utilities, Financials, Technology, and Communication Services.
Replay:
Today’s Links:
Fair Values for June 4, 2026
S&P: 11.21
NQ: 53.09
Dow: 71.85
Daily Breadth Data 📊
For Wednesday, June 3, 2026
• NYSE Breadth: 22% Upside Volume
• Nasdaq Breadth: 39% Upside Volume
• Total Breadth: 33% Upside Volume
• NYSE Advance/Decline: 24% Advance
• Nasdaq Advance/Decline: 28% Advance
• Total Advance/Decline: 27% Advance
• NYSE New Highs/New Lows: 98 / 99
• Nasdaq New Highs/New Lows: 249 / 204
• NYSE TRIN: 1.13
• Nasdaq TRIN: 0.62
Weekly Breadth Data 📈
For the Week Ending Friday, May 29, 2026
• NYSE Breadth: 56% Upside Volume
• Nasdaq Breadth: 65% Upside Volume
• Total Breadth: 62% Upside Volume
• NYSE Advance/Decline: 58% Advance
• Nasdaq Advance/Decline: 64% Advance
• Total Advance/Decline: 62% Advance
• NYSE New Highs/New Lows: 267 / 104
• Nasdaq New Highs/New Lows: 858 / 256
• NYSE TRIN: 1.09
• Nasdaq TRIN: 0.97
S&P 500/NQ 100 BTS Trading Levels (Premium Only)
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Today’s Economic Calendar
Earnings:
PTG Room Summary – For Wednesday, June 3, 2026
The session followed David Dube’s Daily Trade Strategy closely, with the early plan playing out well and the market later shifting into a more bearish posture. The key takeaway was that predefined structure, zone discipline, and patience around valid triggers helped guide the day effectively.
Morning Setup
David opened the room with the standard PTG links, disclaimer, and daily preparation for the day.
The room checked audio/video and settled into pre-market discussion.
Traders noted the upcoming 10:00 AM ISM Services PMI report.
David clarified that PTG’s Cycle Day runs from 18:00 to 17:59 ET, covering the full Globex-to-cash trading session.
Early Market Plan
David was looking for a retest of the CD1 low.
That objective was reached quickly, with David confirming that the prior low target was fulfilled.
The room observed that the A-period range was wide, around 40 handles.
Price was also seen retesting the prior day’s low from underneath, giving the morning a structurally important tone.
Key Intraday Levels
David defined the active trading “sandbox” as approximately 7595–7575, subject to change.
This range helped frame the auction and gave traders clear zone edges to work from.
Later, David highlighted 7575 as the important downside threshold.
A violation and conversion below 7575 was described as opening the “trap door” for lower prices.
Positive Trade Read
David called the session a Normal Cycle Day 2 textbook example.
He said the DTS Briefing Plan played out near perfection in identifying the zone edges.
This was the strongest positive takeaway of the day: the pre-planned levels gave traders a reliable roadmap.
Traders who stayed aligned with the DTS zones had a clear framework for decision-making.
Teaching Moment
A member asked why a discount setup near 7594 did not trigger.
David explained that the EMA slope was too flat.
The lesson was not to force trades when trigger conditions are incomplete.
Data differences between platforms were also discussed, with David noting that small level variations are normal and not something to over-focus on.
Afternoon Shift
By midday, David warned that a break and conversion below 7575 could lead to lower prices.
He later noted that the session was shaping up as a possible key reversal day.
Price was trading below the 3-day midpoints, strengthening the bearish read.
Near the close, David reported a $2.7 billion MOC sell imbalance, which supported the weaker late-day tone.
Main Lessons
The Daily Trade Strategy plan worked very well, especially in identifying zone edges.
The CD1 low retest and prior low target fulfillment showed the value of using cycle-day structure.
The room reinforced the importance of waiting for valid triggers rather than taking marginal setups.
The 7575 conversion level became the key line in the sand for downside continuation.
Overall, the day rewarded preparation, patience, and disciplined execution around predefined levels.
DTG Room Preview – Thursday, June 4, 2026
Market Tone
US index futures are mixed this morning.
ES/NQ are slightly lower, while YM/RTY are modestly green.
VIX is firmer, gold is bid, and Bitcoin is sharply lower, pointing to a mild safety rotation.
Main drivers today: geopolitical headlines, AI-chip sentiment, energy volatility, and 8:30am data.
Geopolitical & Policy Risk
Iran-related headline risk remains the top intraday volatility driver.
A Republican-led House vote against the Iran war adds uncertainty around US foreign policy.
Trump’s tariff framework is back in focus, though reports suggest the final scope may be narrower than feared.
Any surprise tariff expansion could pressure industrials, semis, consumer names, and RTY.
Tech & AI Focus
Broadcom pressured AI-chip sentiment after disappointing AI sales forecasts.
TSMC warned chip supply may remain tight for years due to AI demand.
Foxconn’s collaboration with Intel highlights rising competition in AI infrastructure.
NQ sensitivity remains highest in semis and AI-infrastructure names.
Energy & Macro
Oil is slightly lower today, but the broader multi-week uptrend remains intact.
Middle East tensions keep energy and inflation risk in focus.
Vietnam’s widening trade deficit points to softer Asian demand and possible pressure on global manufacturing flows.
Calendar & Earnings
8:30am ET: Jobless Claims, Nonfarm Productivity, Unit Labor Costs.
8:30am ET: Richmond Fed’s Barkin speaks.
1:10pm ET: San Francisco Fed’s Daly speaks on AI’s economic impact.
Premarket earnings: CIEN.
After the close: DOCU, LULU, IOT, GWRE, COO.
ES Technical Outlook
Wednesday’s pullback followed nine straight up days and is being viewed as a healthy reset.
ES broke below the former short-term uptrend channel support at 7561/66 overnight.
That zone is now acting as resistance.
Bulls need to reclaim 7561/66 to regain momentum.
If bears remain in control, downside room opens toward 7475/80, then 7422/27.
ES Levels
Resistance: 7561/66, 7614/19, 7677/82, 8070/75
Support: 7475/80, 7422/27
