2026-07-16

MES1!

PMP – Thursday, July 16, 2026

Today's session follows one of the week's most volatile trading days.

Yesterday's PPI largely reinforced the disinflation narrative that began with Tuesday's CPI report, but those macro tailwinds continue competing with escalating geopolitical developments. Overnight, Iran warned the United States that the Strait of Hormuz remains a "red line" and vowed retaliation if additional U.S. strike threats materialize. At the same time, semiconductor weakness has futures trading modestly lower despite the broader bullish higher-timeframe trend.

Today's session becomes a battle between macro fundamentals and headline risk.

• ▸Softer inflation continues supporting equities.
• ▸Escalating geopolitical tensions continue supporting volatility.

Institutions now need to determine whether yesterday's weakness was simply profit-taking inside a bullish trend or the beginning of a deeper retracement.

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CNBC Headlines

S&P 500 futures edge lower as semiconductors fall

Technology leadership pauses after yesterday's session as semiconductor stocks trade lower overnight. While the higher-timeframe trend remains constructive, chip weakness removes one of the market's strongest leadership groups heading into today's session.

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Wall Street's profit boom has Europe ripping up its banking rulebook

Strong profitability among U.S. financial institutions continues highlighting the relative strength of the U.S. banking sector. While this is unlikely to materially move today's session, it reinforces the broader backdrop of resilient corporate earnings despite elevated geopolitical uncertainty.

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Iran warns U.S. of Hormuz 'red line,' says it will retaliate to Trump's strike threats

Geopolitical risk remains the dominant wildcard.

Although inflation has recently become the primary driver of equity prices, renewed threats surrounding the Strait of Hormuz continue supporting volatility and keeping energy markets sensitive to additional headlines.

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Overnight Headlines

• ▸Semiconductor stocks trade modestly lower overnight.
• ▸Iran warns the U.S. against further military escalation in the Strait of Hormuz.
• ▸Futures remain inside yesterday's range despite renewed geopolitical headlines.
• ▸Europe continues discussing banking regulation changes following strong U.S. bank earnings.
• ▸Traders continue digesting yesterday's PPI while awaiting today's retail sales data.

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Economic Calendar

8:30 AM ET

🟠 Core Retail Sales m/m

Forecast: 0.0%

Previous: 0.8%

🟠 Retail Sales m/m

Forecast: 0.2%

Previous: 0.9%

🟠 Philly Fed Manufacturing Index

Forecast: 12.7

Previous: 10.3

🟠 Unemployment Claims

Forecast: 216K

Previous: 215K

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Additional Events

• ▸10:00 AM — Business Inventories
• ▸10:30 AM — Natural Gas Storage
• ▸Treasury Currency Report
• ▸Multiple FOMC Speakers
• ▸President Trump scheduled to speak later this evening

While today's calendar lacks major inflation releases, retail sales will provide another important measure of consumer strength following this week's CPI and PPI data.

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Weekly Context

This week has become a tug-of-war between falling inflation and rising geopolitical uncertainty.

Tuesday's CPI and Wednesday's PPI both reinforced the disinflation narrative, allowing institutions to continue supporting higher equity prices.

At the same time, continued military escalation involving Iran has repeatedly interrupted otherwise clean auction structures, producing larger-than-normal intraday swings and frequent liquidity sweeps.

Today's session will likely determine whether institutions continue accepting higher prices or begin reducing exposure ahead of the weekend.

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VIX Analysis

Current Price: ~16.22

The VIX remains inside last week's range after successfully rotating lower yesterday before recovering overnight.

Price is now hovering near the Weekly Opening Price, placing volatility at an important decision point.

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Bullish VIX Scenario (Bearish Equities)

Acceptance above:

• ▸

  Daily High (16.36)

• ▸

  Previous Day High (16.57)

• ▸

  Swing High (16.79)

• ▸

  1H Bearish Fair Value Gap

  • ▸Low: 16.89
  • ▸Mid: 17.05
  • ▸High: 17.20
• ▸

  Monthly Opening Price (17.11)

Acceptance back into the 1H Fair Value Gap would suggest institutions are repricing geopolitical risk after yesterday's relief rally.

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Bearish VIX Scenario (Bullish Equities)

Failure below:

• ▸

  Daily Open (15.82)

• ▸

  Daily Low (15.77)

• ▸

  Weekly Low

• ▸

  New Week Opening Gap

  • ▸Mid: 15.68
  • ▸Lower Quadrant: ~15.36
  • ▸Low: 15.03
• ▸

  Previous Week Low (14.96)

• ▸

  Yearly Opening Price (14.85)

A continued decline in volatility would reinforce this week's broader risk-on environment.

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MNQ

Current Price: ~29,450

NASDAQ has already swept yesterday's lows overnight and is now trading inside higher-timeframe demand.

Technology continues to lead this week's auction, but overnight semiconductor weakness introduces the possibility of another liquidity sweep before buyers regain control.

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Bullish Structure

Acceptance above:

• ▸

  Intraday Swing High

• ▸

  Daily Opening Price (29,707.75)

• ▸

  Daily High (29,796.50)

• ▸

  Weekly Opening Gap

  • ▸Low: 29,956.75
  • ▸Mid: 30,013.00
  • ▸High: 30,069.00

If buyers reclaim the Weekly Opening Gap, institutions would likely begin targeting last week's highs again.

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Bearish Structure

Failure below:

• ▸Previous Day Low
• ▸Weekly Low (29,303.25)

Primary demand:

• ▸

  1H Bullish Fair Value Gap

  • ▸High: 29,324.00
  • ▸Mid: 29,275.25
  • ▸Low: 29,226.50

Additional support:

• ▸Swing Low (29,034.00)

This area remains the primary institutional demand zone should selling continue.

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MES

Current Price: ~7,596

MES has held up considerably better than MNQ overnight.

Unlike NASDAQ, ES has not yet violated yesterday's previous day low, creating slight bullish divergence between the two indices.

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Bullish Structure

Acceptance above:

• ▸

  Potential Order Block (7,609.75)

• ▸

  Weekly Opening Price (7,607.25)

• ▸

  Weekly High (7,615.50)

• ▸

  Weekly Opening Gap

  • ▸Low: 7,607.25
  • ▸Mid: 7,616.75
  • ▸High: 7,626.00
• ▸

  Previous Day High (7,632.00)

• ▸

  Previous Day High (7,636.50)

Continuation above these levels would suggest institutions remain committed to this week's bullish macro narrative.

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Bearish Structure

Failure below:

• ▸Previous Day Low (7,571.75)
• ▸Swing Low (7,570.00)

Primary demand:

• ▸Monthly Opening Price (7,543.50)

Additional support:

• ▸1H Bullish Fair Value Gap
• ▸Daily Bullish Fair Value Gap

A break beneath yesterday's lows would expose deeper higher-timeframe demand.

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Narrative Alignment

Institutional participants have already received two favorable inflation reports this week.

Today's focus shifts away from inflation and toward consumer strength and headline risk.

The question is no longer:

"Is inflation improving?"

The question now becomes:

"Can buyers continue accepting higher prices despite continued geopolitical escalation?"

If institutions remain comfortable ignoring overnight headlines, this week's bullish trend can continue.

If geopolitical developments begin outweighing inflation optimism, expect another round of sharp repricing similar to earlier this week.

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Trading Focus

Today's edge comes from patience and confirmation, not anticipation.

Monitor whether price:

• ▸Accepts back above the Weekly Opening Gap and resumes this week's uptrend.
• ▸Rejects that area and rotates back toward higher-timeframe demand.
• ▸Responds aggressively to any new geopolitical headlines throughout the session.

With no major inflation release today, headline risk may once again dominate intraday price action.

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Daily Bias

Neutral

The higher-timeframe trend still favors buyers, but today's overnight weakness, semiconductor pressure, and continued geopolitical uncertainty reduce directional conviction.

Institutions have already repriced inflation this week.

Now the market must determine whether that repricing outweighs continued geopolitical escalation.

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Bullish Confirmation

• ▸VIX rejects yesterday's highs and rotates back toward the New Week Opening Gap.
• ▸MES accepts above 7,607 and begins trading through the Weekly Opening Gap toward 7,626 and yesterday's highs.
• ▸MNQ reclaims the Daily Open and Weekly Opening Gap before extending toward 30,013–30,069.

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Bearish Confirmation

• ▸VIX reclaims the 1H Bearish Fair Value Gap and advances toward the Monthly Opening Price.
• ▸MES loses yesterday's low and rotates back toward the Monthly Opening Price and higher-timeframe demand.
• ▸MNQ loses the Weekly Low and trades deeper into the 1H Bullish Fair Value Gap before testing the 4H demand zone.

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Trader's Objective

• ▸Let retail sales establish today's macro direction before increasing exposure.
• ▸Continue reducing position size while geopolitical headlines remain capable of producing abrupt repricing.
• ▸Only execute A+ setups aligned with the higher-timeframe narrative.
• ▸Respect VIX confirmation before committing to directional trades.
• ▸If the market remains trapped between macro optimism and geopolitical uncertainty, preserve capital and allow the auction to develop naturally.

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Overall Feedback

This PMP demonstrates a growing understanding that markets are no longer trading on technical structure alone. This week's auction has repeatedly shifted between inflation data, earnings, and geopolitical developments, forcing institutions to constantly reprice risk. Your playbook appropriately recognizes that dynamic by framing today's session around acceptance versus rejection rather than prediction.

One additional strength in today's recording was your observation that MES and MNQ were showing different behavior overnight, with MNQ already sweeping yesterday's lows while MES held above its prior day's low. That type of intermarket divergence is becoming one of the strongest parts of your methodology and adds another layer of confirmation beyond individual chart patterns. By continuing to combine macro narrative, cross-market relationships, and liquidity mapping, your PMPs are increasingly preparing traders for the auction itself rather than simply identifying price levels.