2026-08-03

MES1!

PMP – Monday, August 3, 2026

The market begins August attempting to price another geopolitical de-escalation.

President Trump called off planned strikes against Iran, oil prices fell sharply, and equity futures opened higher. That initially supports a risk-on narrative. However, Iran’s Foreign Ministry says there are no direct talks with the United States, and that current negotiations with Oman concern only a temporary shipping route through the Strait of Hormuz.

That distinction is critical.

The United States is framing the situation as movement toward a broader agreement. Iran is framing it as a limited maritime negotiation that does not resolve the war, reopen Hormuz fully, or establish direct U.S.–Iran talks. (Reuters)

Therefore, today’s opening strength should not automatically be treated as confirmation of lasting peace.

The market has repriced the immediate threat of attack, but it has not yet resolved the underlying geopolitical dispute.

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CNBC Headlines

Dow futures jump 400 points after Trump calls off planned attacks, oil prices slide

Equity futures opened higher as traders priced out part of the immediate military-risk premium following Trump’s decision not to proceed with another large attack.

Oil prices fall more than 5% as Middle East tensions ebb on diplomatic efforts

Oil declined sharply as markets interpreted the delay in military action and continuing Oman-mediated diplomacy as reducing the immediate probability of further supply disruption. Other reporting placed WTI near [amount redacted] and Brent near [amount redacted] after declines of approximately 6% and 5%, respectively. (MarketWatch)

The oil move supports equities, but the durability of that relationship depends on whether diplomacy progresses beyond the temporary shipping-route discussions.

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Overnight Headlines

• ▸Trump called off a planned military attack against Iran.
• ▸Equity futures opened higher in response.
• ▸Oil prices declined sharply as the immediate escalation premium was reduced.
• ▸Trump indicated that negotiations with Iran were imminent.
• ▸Iran denied that direct talks with the United States are currently occurring.
• ▸Iranian officials said discussions with Oman concern a temporary safe route through the Strait of Hormuz.
• ▸Iran maintains that an agreement with Oman alone is insufficient to fully reopen the strait while U.S. military pressure continues.
• ▸The Strait of Hormuz is not expected to return automatically to its prewar operating structure.
• ▸Reports also indicated that Iranian air defenses shot down an MQ-9 drone, reinforcing that military risk has not disappeared.
• ▸The market is again trading two competing narratives: U.S. de-escalation optimism versus Iran’s narrower and more guarded diplomatic position. (Reuters)

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Economic Calendar

9:45 a.m. ET

🟡 Final Manufacturing PMI

• ▸Forecast: 53.8
• ▸Previous: 53.8

10:00 a.m. ET

🔴 ISM Manufacturing PMI

• ▸Forecast: 54.0
• ▸Previous: 53.3

🟠 ISM Manufacturing Prices

• ▸Forecast: 70.0
• ▸Previous: 73.0

🟡 Construction Spending m/m

• ▸Forecast: 0.2%
• ▸Previous: 0.1%

Additional Releases

🟡 Total Vehicle Sales

• ▸Forecast: 16.3 million
• ▸Previous: 16.5 million

🟡 Loan Officer Survey

• ▸Tentative

The 10:00 a.m. ISM release is today’s primary scheduled catalyst.

Because this is also the beginning of NFP week, markets may interpret the manufacturing data through both the growth and Federal Reserve lenses:

• ▸Stronger activity with easing prices could support equities.
• ▸Strong activity with elevated prices could revive rate concerns.
• ▸Weaker activity may initially pressure equities, but the response will depend on whether traders interpret it as disinflationary or recessionary.

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Monthly and Weekly Context

This is the first trading session of a new week and a new month.

That gives today’s opening prices additional importance because the following references are aligned:

• ▸Daily Open
• ▸Weekly Open
• ▸Monthly Open

On MES, those references are clustered at 7,549.75.

On VIX, they are clustered near 16.03.

These opens become major acceptance levels rather than ordinary intraday references.

The market also begins the month with significant weekend gaps:

• ▸MES opened above last week’s closing structure.
• ▸MNQ opened higher but remains inside the prior week’s gap structure.
• ▸VIX opened near the upper portion of an older New Week Opening Gap and is trading around a major open cluster.

The question is no longer simply whether the geopolitical news is bullish.

The question is:

Will the market accept the weekend repricing above the new monthly and weekly opens?

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VIX Analysis

Current Price:

~15.98

VIX is trading inside the July 13 New Week Opening Gap and near its upper-quadrant level.

Despite the bullish equity headlines, VIX did not produce a substantial downside gap. Instead, it remains compressed near the aligned Daily, Weekly, and Monthly Opens.

That leaves volatility at an important decision point.

Key Opening Structure

Daily, Weekly and Monthly Open:

16.03

Current intraday range:

• ▸Daily High: 16.22
• ▸Daily Low: 15.90

July 13 New Week Opening Gap

• ▸High: 16.32
• ▸Midpoint: 15.68
• ▸Low: 15.03
• ▸Upper quadrant: ~15.99
• ▸Lower quadrant: ~15.36

Additional downside references:

• ▸Previous Week Low: 15.82
• ▸Previous Day Low: 15.77
• ▸Previous Week Low: 15.64
• ▸Previous Month Low: 14.96
• ▸Yearly Open: 14.85

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Bullish VIX Scenario

Bearish Equities

For VIX to confirm renewed risk aversion, price must first reclaim the opening cluster and accept above the current range.

Look for acceptance above:

• ▸Daily/Weekly/Monthly Open: 16.03
• ▸Daily High: 16.22
• ▸NWOG High: 16.32
• ▸Swing High: 16.70
• ▸Quarterly Open: 17.11
• ▸Rejection-block area: ~17.85
• ▸Previous Day High: 18.70

The expected bullish sequence would be:

1. ▸Reclaim 16.03
2. ▸Take and hold above 16.22
3. ▸Accept above the NWOG high at 16.32
4. ▸Expand toward 16.70
5. ▸Challenge the Quarterly Open at 17.11
6. ▸Potentially continue into the 17.85 rejection area

A move through 16.22 without acceptance above 16.32 could still be only a liquidity sweep.

The more meaningful bearish-equity confirmation would be VIX establishing value above 16.32.

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Bearish VIX Scenario

Bullish Equities

For the equity rally to remain supported, VIX needs to lose the upper portion of the gap and begin accepting beneath the opening cluster.

Look for failure below:

• ▸Daily Low: 15.90
• ▸Previous Week Low: 15.82
• ▸Previous Day Low: 15.77
• ▸NWOG Midpoint: 15.68
• ▸Previous Week Low: 15.64
• ▸Lower quadrant: ~15.36
• ▸NWOG Low: 15.03
• ▸Previous Month Low: 14.96
• ▸Yearly Open: 14.85

The strongest bullish-equity confirmation would be:

1. ▸VIX loses 15.90
2. ▸Accepts beneath 15.82–15.77
3. ▸Trades through the midpoint at 15.68
4. ▸Extends toward 15.36–15.03

The 15.03–14.85 area should be treated as potential higher-timeframe support for volatility. A VIX decline into that zone may support equities initially, but it could also create the conditions for a later volatility reversal.

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MNQ

Current Price:

~28,486.50

MNQ opened higher but has not maintained the same degree of strength as MES.

Price is trading beneath the aligned opening reference at 28,567.50 and has already rotated toward the midpoint of the current opening-gap structure.

This relative weakness is important.

MES remains above its major opening cluster, while MNQ is already trading below its own. That creates bearish SMT-style divergence and suggests the technology-led risk-on response is less convincing than the S&P response.

Key Opening Structure

Daily/Weekly/Monthly Open:

28,567.50

Current references:

• ▸Daily High: 28,698.25
• ▸Daily Low: 28,466.50
• ▸Swing Low: 28,472.00

New Week Opening Gap

• ▸High: 28,501.50
• ▸Midpoint: 28,404.25
• ▸Low: 28,306.75

Additional chart references:

• ▸Intermediate level: 28,425.75
• ▸Lower reference: 28,284.00
• ▸Previous Day Low: 28,079.75
• ▸4H Bullish FVG High: 27,995.50
• ▸4H Bullish FVG Midpoint: 27,790.75
• ▸Bullish Order Block: ~27,697.00–27,609.75

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Bullish Structure

MNQ must reclaim the opening cluster before the overnight rally can be treated as accepted.

Look for acceptance above:

• ▸Opening cluster: 28,567.50
• ▸Daily High: 28,698.25
• ▸Previous Day High: 28,725.75
• ▸Previous Week High: 28,763.75
• ▸Swing High: 28,782.00
• ▸Higher Swing High: 29,137.75
• ▸Previous reference: 29,192.50
• ▸Prior Week High: 29,363.50

The bullish sequence would be:

1. ▸Hold the current downside reaction above the gap midpoint
2. ▸Reclaim 28,567.50
3. ▸Take the Daily High at 28,698.25
4. ▸Clear the stacked liquidity from 28,725.75–28,782
5. ▸Hold a retracement above the opening cluster
6. ▸Extend toward 29,137.75

Reclaiming 28,567.50 is not enough by itself. Price must also demonstrate displacement through the daily high and hold above the stacked highs.

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Bearish Structure

MNQ has already shown early rejection from the upper portion of the opening structure.

Look for continued acceptance below:

• ▸Daily Low: 28,466.50
• ▸Swing Low: 28,472.00
• ▸Intermediate level: 28,425.75
• ▸NWOG Midpoint: 28,404.25
• ▸NWOG Low: 28,306.75
• ▸Lower reference: 28,284.00
• ▸Previous Day Low: 28,079.75
• ▸4H Bullish FVG High: 27,995.50
• ▸4H Bullish FVG Midpoint: 27,790.75

The expected downside sequence would be:

1. ▸Lose 28,466.50
2. ▸Trade through 28,425.75
3. ▸Test the NWOG midpoint at 28,404.25
4. ▸Extend toward 28,306.75–28,284
5. ▸Evaluate the response around the previous-day low at 28,079.75

The 28,306.75–28,284 area may create a meaningful reaction because it represents the lower portion of the opening gap. However, a failure there would expose the higher-timeframe fair value gap beginning near 27,995.50.

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MES

Current Price:

~7,566.50

MES is the stronger of the two indices.

Price remains above the aligned Daily, Weekly, and Monthly Open at 7,549.75 and has already taken multiple previous-day highs.

The bullish structure remains intact while price accepts above the opening cluster, but MES is also approaching higher resistance where the initial weekend rally could begin to retrace.

Key Opening Structure

Daily, Weekly and Monthly Open:

7,549.75

Current references:

• ▸Daily High: ~7,567.75
• ▸Daily Low: 7,543.50
• ▸London Swing Low: 7,547.25
• ▸Previous Day High: 7,550.00
• ▸Previous Day High: 7,563.00
• ▸Next Previous Day High: 7,574.75
• ▸1H Order Block: ~7,586.75

Current New Week Opening Gap

• ▸High: 7,549.75
• ▸Midpoint: 7,526.00
• ▸Low: 7,502.50
• ▸Upper quadrant: ~7,537.75
• ▸Lower quadrant: ~7,514.75

Higher New Week Opening Gap

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

Additional references:

• ▸Swing High near midpoint: 7,615.50
• ▸Previous Week High: ~7,634
• ▸All-Time High: ~7,648.75

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Bullish Structure

MES has already accepted above the opening cluster and taken nearby liquidity.

For continued upside, look for acceptance above:

• ▸Current Daily High: ~7,567.75
• ▸Previous Day High: 7,574.75
• ▸1H Order Block: ~7,586.75
• ▸Higher NWOG Low: 7,607.25
• ▸Swing High: 7,615.50
• ▸NWOG Midpoint: 7,616.75
• ▸NWOG High: 7,626.00
• ▸Previous Week High: ~7,634
• ▸All-Time High: ~7,648.75

The bullish sequence would be:

1. ▸Hold above 7,549.75
2. ▸Clear 7,567.75–7,574.75
3. ▸Trade through the 1H order block around 7,586.75
4. ▸Reach the higher NWOG at 7,607.25
5. ▸Hold the retracement
6. ▸Extend through 7,615.50–7,626
7. ▸Challenge the previous-week and all-time highs

The 7,607.25–7,626 zone is the primary upside objective. It represents a higher opening-gap structure and should be treated as a potential reaction area rather than assumed continuation.

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Bearish Structure

For the overnight rally to begin failing, MES must lose the aligned opening cluster and accept back inside the New Week Opening Gap.

Look for failure below:

• ▸London Swing Low: 7,547.25
• ▸Daily Low: 7,543.50
• ▸Daily/Weekly/Monthly Open and NWOG High: 7,549.75
• ▸Upper quadrant: ~7,537.75
• ▸NWOG Midpoint: 7,526.00
• ▸Lower quadrant: ~7,514.75
• ▸NWOG Low: 7,502.50
• ▸Prior NWOG High: 7,489.00
• ▸Prior NWOG Midpoint: 7,466.50

The bearish sequence would be:

1. ▸Reject one of the highs above current price
2. ▸Lose 7,547.25
3. ▸Accept beneath 7,549.75
4. ▸Rotate toward 7,537.75
5. ▸Trade through the midpoint at 7,526
6. ▸Extend toward 7,514.75–7,502.50

The first meaningful evidence of a failed risk-on gap would be sustained trade below 7,549.75.

Until that happens, MES remains structurally stronger and should not be shorted solely because MNQ is weak.

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Intermarket Relationship

The most important chart relationship this morning is the divergence between MES and MNQ.

MES

• ▸Trading above the Daily, Weekly, and Monthly Open
• ▸Has taken multiple previous-day highs
• ▸Holding near the overnight high

MNQ

• ▸Trading below its Daily, Weekly, and Monthly Open
• ▸Rotating toward its NWOG midpoint
• ▸Showing rejection from the overnight high

VIX

• ▸Compressed near its own Daily, Weekly, and Monthly Open
• ▸Neither confirming a major volatility expansion nor a clean volatility breakdown

This creates a mixed market.

The S&P is pricing de-escalation more confidently than technology, while VIX remains undecided.

That means today’s cleanest directional signal may come from alignment, not from any one chart independently.

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Narrative Alignment

The macro story is initially bullish:

• ▸Planned attacks were called off.
• ▸Oil prices fell.
• ▸Equity futures opened higher.
• ▸Immediate supply-disruption fears eased.

But the political foundation remains unstable:

• ▸Iran denies direct U.S. talks.
• ▸Oman’s negotiations concern a temporary shipping route.
• ▸The Strait of Hormuz has not been fully reopened.
• ▸Iran continues linking broader normalization to the end of U.S. military pressure.
• ▸Military incidents have not completely stopped.

Therefore, today’s market is pricing a reduction in the immediate probability of escalation, not a confirmed end to the conflict.

The central question is:

Will the market continue accepting the U.S. de-escalation narrative, or begin repricing Iran’s more restrictive interpretation?

That answer should appear through the open clusters:

• ▸MES: 7,549.75
• ▸MNQ: 28,567.50
• ▸VIX: 16.03

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Trading Focus

Today’s edge comes from determining whether the weekend gap is accepted or retraced.

Bullish Equity Conditions

• ▸MES remains above 7,549.75
• ▸MNQ reclaims 28,567.50
• ▸VIX loses 15.90 and accepts beneath 15.82
• ▸MES and MNQ both displace through their daily highs
• ▸Oil remains lower
• ▸No geopolitical headline contradicts the de-escalation narrative

Bearish Equity Conditions

• ▸VIX reclaims 16.03 and accepts above 16.32
• ▸MES loses 7,549.75
• ▸MNQ remains below 28,567.50 and breaks 28,466.50
• ▸Both indices begin accepting inside their New Week Opening Gaps
• ▸New headlines confirm that diplomatic progress is narrower than initially priced

Do not use MES strength alone to justify longs while MNQ remains structurally weak.

Do not use MNQ weakness alone to justify shorts while MES remains accepted above its monthly and weekly opening price.

Wait for correlation.

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Daily Bias

Neutral to Bullish

The macro repricing and MES structure favor buyers, but the bullish case is not fully confirmed because MNQ is trading below its opening cluster and VIX has not broken down decisively.

The bias becomes stronger only if the three markets align.

Bullish Confirmation

• ▸VIX accepts below 15.82–15.77
• ▸MES holds 7,549.75 and clears 7,574.75
• ▸MNQ reclaims 28,567.50 and takes 28,698.25
• ▸Both indices defend their first retracement after taking the highs
• ▸Oil remains under pressure as diplomacy continues

Bearish Confirmation

• ▸VIX accepts above 16.32
• ▸MES loses 7,549.75 and rotates toward 7,526
• ▸MNQ loses 28,466.50 and trades through 28,404.25
• ▸Both indices accept inside their New Week Opening Gaps
• ▸Iran-related headlines contradict the market’s assumption of imminent U.S.–Iran negotiations

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Trader’s Objective

• ▸Respect your fatigue level.
• ▸Do not press risk because the market opened with a large macro narrative.
• ▸Allow the 10:00 a.m. ISM release to clear before forcing a directional conclusion.
• ▸Require alignment between VIX, MES, and MNQ.
• ▸Treat the Daily, Weekly, and Monthly Opens as decision levels.
• ▸Do not chase MES while MNQ is below its open.
• ▸Do not force a short while MES remains accepted above 7,549.75.
• ▸Use today primarily to observe how the new model handles monthly-open alignment, opening gaps, and intermarket divergence.
• ▸Process and model validation remain more important than P&L.

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Overall Feedback

This PMP presents a more difficult environment than the headline implies.

At first glance, the trade appears obvious:

Trump canceled an attack, oil fell, and equities should rally.

But your charts reveal that the market is not expressing that narrative uniformly.

MES is clearly stronger. MNQ is already showing rejection. VIX is sitting almost directly on the aligned Daily, Weekly, and Monthly Open. That makes today less about predicting the news and more about identifying which market is giving the most truthful signal.

The strongest part of your analysis is your recognition that the United States and Iran are not describing the same diplomatic process.

The United States is presenting the pause as progress toward a deal.

Iran is presenting the talks as a limited negotiation with Oman over temporary maritime access.

That difference matters because the market’s bullish gap is based on the broader interpretation.

The phrase that should govern Monday is:

The attack was canceled, but the conflict has not been resolved.

The opening gaps represent optimism. Acceptance above the monthly and weekly opens would confirm that optimism. Failure back through those opens would reveal that the market repriced more peace than the political facts currently support.