2026-08-12

MES1!

Pre-Market Playbook — Wednesday, August 12, 2026

Market Overview

The major event today is CPI at 8:30 a.m. ET. Price action has been back-and-forth throughout the week, and the indices have largely been waiting for a catalyst. I traded Monday but stayed out Tuesday because price remained stalled during my normal trading window.

Today is another sit-on-my-hands environment before the news. I want CPI to hit, allow the initial volatility and liquidity runs to develop, and then determine which side of the market is actually being delivered.

One thing that continues to stand out is the relationship between the indices and VIX. At times this week they have moved in the same direction rather than displaying their normal inverse relationship. That divergence makes confirmation more difficult and is another reason not to force a trade.

The broader market also continues to show a disconnect between the performance of the major indices and conditions in the underlying economy. Regardless of that macroeconomic debate, my job today is to trade the structure being delivered rather than what I think the economy should be doing.

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Economic Calendar

8:30 a.m. ET — CPI

Core CPI m/m

• ▸Previous: 0.0%
• ▸Forecast: 0.2%

Core CPI y/y

• ▸Previous: 2.6%
• ▸Forecast: 2.5%

CPI m/m

• ▸Previous: -0.4%
• ▸Forecast: 0.1%

CPI y/y

• ▸Previous: 3.5%
• ▸Forecast: 3.4%

Additional events later in the session:

• ▸10:30 a.m. — Crude Oil Inventories
• ▸1:01 p.m. — 10-Year Bond Auction
• ▸2:00 p.m. — Federal Budget Balance

CPI is the event that matters most for my morning trading window.

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Headlines / Macro

Stock futures inch higher ahead of Wednesday’s big inflation report

The market is waiting on CPI for another read on inflation and the potential direction of Fed policy.

AI’s costly buildout complicates the Fed’s inflation fight

The continued capital spending associated with the AI buildout adds another element to the inflation discussion and the Fed's policy outlook.

There is also renewed uncertainty surrounding Iran.

A senior Iranian source stated that there are no discussions over extending the ceasefire between Iran and the U.S. According to the report, Iran does not recognize a formal ceasefire start date and therefore does not view there as being anything to extend. This remains another headline-risk variable alongside today's inflation data.

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VIX

VIX continues to make quick moves in both directions without establishing sustained expansion. We're currently trading inside the New Week Opening Gap and sitting close to the weekly opening price.

Current price is approximately 15.38.

Current Structure

• ▸Weekly opening price / NWOG high: 15.40
• ▸Today's high: approximately 15.42
• ▸Today's low: approximately 15.28
• ▸Weekly high: 15.72
• ▸Weekly low: 15.10

VIX is effectively sitting at a decision point.

VIX Upside

If volatility begins expanding, I want to see:

15.61 — Previous day high → 15.72 — Weekly high → 15.78 — 1H FVG midpoint → 15.96 — 1H FVG high → 16.03 — Monthly opening price → 16.46 — Order-block midpoint

The one-hour bearish fair value gap runs approximately:

15.59 → 15.78 → 15.96

A sustained move through that zone would be important because it would begin putting pressure on the bullish index scenario.

VIX Downside

If VIX rejects and moves lower:

15.28 — Daily opening area → 15.15 — NWOG midpoint → 15.10 — Weekly low → 14.90 — NWOG low → 14.85 — Yearly opening price → 14.77 — Previous week low → 14.43 — Lower liquidity

A VIX move through 15.15 → 15.10 → 14.90/14.85 would provide much cleaner confirmation for continued index strength.

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MNQ

MNQ sold off Tuesday after the change in state of delivery below 29,748.00. That move ran through multiple liquidity levels and eventually established the weekly low at:

29,533.50

Overnight, price has steadily retraced from that low.

Current price is approximately 29,830, placing MNQ back inside the area associated with the previous shift in delivery.

That makes this an important decision zone.

Immediate Structure

• ▸Current area: ~29,830
• ▸Daily high: 29,849.00
• ▸Pre-market swing low: 29,782.25
• ▸Weekly opening price: 29,851.50
• ▸Previous day high: 29,887.00
• ▸Weekly high: 29,985.00
• ▸Weekly low: 29,533.50

We're essentially testing the previous delivery structure from underneath.

MNQ Bullish Scenario

For the bullish scenario, I want to see price reclaim the weekly opening price and begin taking the overhead liquidity.

29,851.50 — Weekly open → 29,887.00 — Previous day high → 29,985.00 — Weekly high → 29,915+ — 1H order-block area → 30,073.25 area — Cluster of previous-week highs → 30,319.75 — Higher previous-day liquidity

The first major confirmation would be reclaiming 29,851.50 and then taking 29,887.

Above 29,985, MNQ begins opening the door toward the cluster around 30,073.

MNQ Bearish Scenario

If this current retracement fails, I want to see:

29,782.25 — Pre-market swing low → 29,663.00 — Daily opening price → 29,625.00 — Daily low → 29,533.50 — Weekly low → 29,455.00 — Previous day low → 29,241.00 — Major lower swing liquidity

The important point is that I don't want to anticipate the rejection.

If MNQ rejects this previous delivery zone and loses 29,782.25, the downside scenario starts becoming more interesting. Losing the daily opening structure would then expose the weekly low again.

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MES

MES has a very similar structure.

Tuesday's selloff developed after the change in state of delivery around 7,775.00. The move occurred on the 11:00 candle, outside my normal trading window, and eventually established the weekly low at:

7,739.25

Price has since retraced higher overnight.

Current price is approximately 7,769.50.

We're now back near the previous change-of-state-of-delivery area, so I expect this region to produce a decision.

Structurally, the selloff completed the initial 0–1, and the overnight rally can currently be viewed as the 1–2 retracement of that downside move.

Immediate Structure

• ▸Current price: ~7,769
• ▸Weekly opening price: 7,777.00
• ▸Pre-market swing low: 7,759.00
• ▸Daily opening price: 7,755.75
• ▸Daily low: 7,748.50
• ▸Weekly low: 7,739.25
• ▸Weekly / previous-day high area: ~7,797.00
• ▸ATH: 7,820.25

MES Bullish Scenario

For bullish continuation:

7,777.00 — Weekly opening price → ~7,797.00 — Weekly / previous-day high → 7,797.75 — Order-block area → 7,809.50 — Order-block midpoint → 7,820.25 — All-time high → 7,850 area — Next major quarter level

The first job for buyers is reclaiming 7,777.

If that happens and price can subsequently clear the 7,797 area, the all-time high at 7,820.25 becomes the obvious liquidity target.

Above ATH, I'll begin working with the quarter levels rather than trying to predict an exact extension.

MES Bearish Scenario

If MES rejects:

7,759.00 — Pre-market swing low → 7,755.75 — Daily opening price → 7,748.50 — Daily low → 7,739.25 — Weekly low → ~7,724.25 — Cluster of previous-day lows

A rejection from the current delivery zone followed by a loss of 7,759 would begin confirming the downside scenario.

From there, I'm watching whether price simply sweeps the daily low and reverses or actually accepts below 7,739.25 and starts targeting the larger liquidity cluster around 7,724.25.

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Correlation Framework

Today I want confirmation between MES, MNQ, and VIX, particularly after CPI.

Bullish Index Confirmation

The cleaner bullish picture would be:

MNQ

• ▸Reclaims 29,851.50
• ▸Takes 29,887
• ▸Begins attacking 29,985

MES

• ▸Reclaims 7,777
• ▸Takes ~7,797
• ▸Begins attacking 7,820.25 ATH

VIX

• ▸Rejects 15.40
• ▸Trades through 15.15
• ▸Attacks 15.10
• ▸Potentially fills the NWOG toward 14.90 / 14.85

Bearish Index Confirmation

The cleaner bearish picture would be:

MNQ

• ▸Loses 29,782.25
• ▸Trades through 29,663
• ▸Begins attacking 29,625 → 29,533.50

MES

• ▸Loses 7,759
• ▸Trades through 7,755.75
• ▸Attacks 7,748.50 → 7,739.25

VIX

• ▸Takes 15.61
• ▸Clears 15.72
• ▸Expands through the 1H FVG toward 15.78 → 15.96
• ▸Potentially challenges 16.03

If the indices and VIX continue moving together, correlation is not giving me clean confirmation and I need to be much more selective.

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Execution Plan

Today is CPI Wednesday.

There is absolutely no reason for me to predict the 8:30 move.

My job is to let CPI create the displacement, watch where liquidity gets taken, identify the resulting change in state of delivery, and then determine whether the move has created a setup within my framework.

The market is already positioned around meaningful structure on all three charts.

That means CPI can easily sweep one side first and deliver toward the opposite side.

Primary rule:

News first. Structure second. Entry last.

I'm not chasing the first candle.

I'm not assuming the first CPI move is the real move.

And I'm not forcing a trade simply because volatility expands.

If the market provides a clean setup after the news, I'll participate.

If VIX and the indices remain poorly correlated or price simply chops around these decision levels, I'll sit on my hands.

There will always be another trade.

Patience is the play until CPI gives the market a reason to move.