PTGDavid began the morning session by highlighting a quote from a trader on Twitter, emphasizing the balance between strictly following rules and having flexibility in adapting to the market. This set the tone for a day of heightened awareness and adaptability.

The overnight review revealed that price action in the S&P failed to expand above the 5500 level, which had been identified as the Line in the Sand (LIS). Instead, prices retreated into a predefined lower target zone between 5390 and 5350, aligning with the Polaris Trading Group’s Daily Trade Strategy. Similar price behavior was noted in the Nasdaq, where PTGDavid identified a pullback zone between 18875 and 18670.

He noted that for bulls to regain control, they needed to reclaim the 5440 level. However, the initial market structure continued to favor sellers. By mid-morning, PTGDavid observed that price was holding below the open range, reinforcing the bearish bias unless a dynamic shift occurred.

A key macro development occurred with the release of the U.S. Core CPI, which came in lower than expected at 2.8% year-over-year. PTGDavid noted that this was the first time in four years that core inflation had dropped below 3%, a significant milestone since the height of the COVID pandemic. Despite this, market sentiment remained risk-off, and traders expressed concerns about underlying structural pressures.

Later in the day, Federal Reserve commentary from Schmid added fuel to the fire. Schmid warned of increased risks related to higher inflation, declining employment, and sluggish growth, along with long-term rate pressures stemming from expanding Treasury supply and potentially shrinking demand.

Throughout the session, PTGDavid emphasized key technical milestones:

• Buyers attempted to step in near the prior high backtest at 5345 but failed to sustain momentum.

• The Central Pivot at 5301.75 emerged as a crucial battleground.

• He shared images and commentary suggesting whales (large institutional traders) were actively suppressing price.

• Visuals included lower channel tests, failed bull flags, and satirical memes capturing trader sentiment.

In the afternoon, volatility remained elevated. Wide five-minute bars, indecisive price action, and a lack of sustained direction signaled choppy conditions. PTGDavid described the afternoon as a “no edge” environment, warning that only brokers seemed to be profiting amid the whipsaws.

Toward the close, a $3 billion MOC (Market-on-Close) buy imbalance provided a final twist, creating potential for a late-session squeeze. Still, the overall sentiment remained defensive, with emphasis on disciplined trading and awareness of structural conditions.

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Educational Takeaways:

• Monitor key levels (LIS, pivots, target zones) and watch how price behaves around them for confirmation or rejection.

• A favorable macro surprise (like lower CPI) does not guarantee bullish momentum if structural sellers dominate.

• Market context changes quickly; flexibility is essential—stick to process but be ready to adapt.

• Volume clusters and failed technical patterns (like bull flags) can signal exhaustion or traps.

• Use tools like VWAP, open range, and central pivots to gauge intraday control shifts.

• Be cautious during choppy, no-edge environments; capital preservation often trumps aggressive entries.