The challenge isn’t just learning to trade one condition. It’s recognising when that condition has changed — and adapting before it costs you.

Just when you settle into a rhythm and build confidence in your approach, the tape flips. And when it does, one of two things happens: you either forget how to trade, or you recognise the opportunity in front of you.

This year alone has produced at least three, possibly four distinct market conditions that futures traders have had to navigate.

January–February: Choppy, directionless price action with occasional bursts of volatility before the market built its top. No clean trend, no reliable follow-through — the grind that frustrates both bulls and bears simultaneously.

March: The selling began. Larger daily ranges, increased VIX, genuine downside momentum. Directional, but volatile — the kind of tape that rewards trend-followers and punishes those still fighting for the long side.

April–May: The complete opposite. A relentless, low-volatility bid that ground higher day after day. Slow, methodical, almost painful on an intraday basis if you were overactive. The market that rewarded patience and punished traders trying to fade or find reversal setups. If you simply bought and held, you looked like a genius. If you day-traded aggressively, you got chopped.

Now: We’ve shifted back into elevated volatility — but with a different character than March. This time it’s aggressive in both directions. Large upside moves followed by large downside moves as the market attempts to find a bottom on this pullback. The kind of tape that creates opportunity and destroys accounts in equal measure — entirely dependent on whether you’ve recognised the regime shift and adjusted accordingly.

Each of these conditions requires a fundamentally different approach. The same strategy, position size, and stop placement that thrived in April’s low-vol grind will get systematically dismantled in the current high-vol, two-sided environment. Understanding which condition you’re in — and adjusting before the market forces you to — is the difference between consistency and frustration.

That’s what this section is about.

Adapting to Market Conditions — How I Adjust My Trading

Here’s something most active traders won’t admit: you’ve probably already forgotten what the prior market condition felt like. When you’re trading every day, you adapt in real time — but that also means the memory of how different the tape was six weeks ago fades fast. Trading based on how the market moved in the past doesn’t help you much today. What matters is recognising what’s in front of you right now.

You have to adapt — and do so quickly. Sit in the wrong condition too long and you enter a rut. You stop trusting your reads, question your setups, and can’t figure out why what was working two weeks ago suddenly isn’t. Then just as you adapt, things change again.

I want to share how I think about identifying market conditions, how I adapt quickly when they shift, and the specific adjustments I’ve made over the last two weeks of elevated volatility.

The first thing to be clear on: I don’t change my system or strategies. The setups, the structure analysis, the order flow reads — none of that changes. The only things that change in a volatile market are how I approach the tape, how I manage risk, and how I manage individual trades. Same edge, different execution.

How to Identify a Market Condition Shift

The most reliable way to spot a condition change is experience — but that’s intuitive and takes years to develop. There are more objective ways to identify it early.

A condition shift almost always starts with material information entering the market. The June 5th NFP print is the most recent example — a jobs number that came in more than double expectations, drove a ~3% decline in ES in a single session, and broke structure that had held for weeks. That’s not a regular data day. That’s a regime event.

The key distinction: if a news event creates a large move but price recovers and closes near where it opened — that’s a reaction, not a shift. If the news creates an expansion that sustains all day, breaks key structural levels, and closes near the extremes — that’s a turning point. The market is repricing its entire forward view, not just reacting to a headline.

The same dynamic played out in April 2025, when Trump’s tariff commentary prompted a 10% SPY rally in a single session — that was a structural shift in the opposite direction. Geopolitical events can do the same: the Iran conflict this year created a sustained energy shock and supply chain disruption that changed the macro regime for months, not days.

Once the material event hits, the technical indicators confirm what the tape is already telling you.

The Three Technical Indicators I Watch

1. VIX — The Regime Thermometer

2. Order Book Liquidity (DOM and Depth)

3. ATR — Average True Range Expansion or Contraction

VIX — The Regime Thermometer

VIX can be used as a volatility gauge, a sentiment indicator, and a regime identifier simultaneously. The baseline this year has been approximately 15-17 in more neutral conditions — in a sustained bull market with low fear, it can compress to 10-13.

The signal I watch: not a single VIX spike, but sustained elevation. A VIX that closes above 20 for multiple consecutive sessions tells me the market has repriced its expectation of future volatility — not just reacted to one event. That sustained elevation is the regime signal.

When VIX spikes above 20 and holds there, I assume the tape is shifting to a more volatile, reactive environment. I don’t stop trading — I trade more defensively. Tighter risk isn’t fear, it’s calibration.

This year has given three clear VIX examples: the late January spike that slowly elevated the average, signalling a condition change was building. March’s sustained high-20s VIX that made elevated volatility the new normal. And the most recent June 5th spike back above 20 — which, until I see several consecutive sessions back below 17, keeps me in defensive mode regardless of what the price action looks like on any individual day.

Order Book Liquidity (DOM & Depth)

This one is more technical and requires daily observation rather than assuming it persists after seeing it once or twice. But once you know what to look for, it becomes one of the most real-time regime indicators available.

In normal market conditions, the NQ DOM is full — every tick has resting orders on both sides of the book. The depth is consistent, market makers are present at every level, and orders flow through without meaningful disruption. Price moves in an orderly, continuous fashion from one level to the next.

In elevated volatility conditions, that changes. The DOM thins out — instead of resting orders at every tick, you start seeing gaps of 2-3 ticks with no orders between clusters.

The practical consequence: price skips. Instead of ticking through each level sequentially, it jumps across the empty levels — which creates slippage, missed entries, and stops getting filled at worse prices than expected. A 20-point stop in a full DOM environment might fill within 1-2 ticks of your level. In a thin DOM environment, the same stop can fill 4-8+ ticks away with no meaningful news catalyst.

The footprint makes this visible in a different way. The example from Friday June 12th illustrates it clearly — periods during the session where it looks like a news event hit the market but nothing came out. What you’re actually seeing is the absence of liquidity: zero prints at certain price levels, single prints, gaps in the data where no contracts traded at all. Price moved through those levels so fast — because there was no resting liquidity to slow it down — that the footprint recorded nothing.

That visual — the empty prints, the single prints, the gaps — is the order flow equivalent of the DOM thinning. Both are telling you the same thing: there’s no one standing in front of this move. In low-vol regime conditions, that almost never happens during RTH. In high-vol regime conditions, it happens multiple times per session.

The practical adjustment: when you see consistent DOM thinning and footprint gaps throughout the session, your limit order strategy needs to become more aggressive. Orders that would normally fill cleanly as resting limits may not get touched — price skips your level and moves 10-15 points beyond it before returning. In thin liquidity conditions, moving closer to market on entries or using smaller size with tighter bid/offer targets becomes necessary to stay in sync with how the tape is actually moving.

If you’re trading the ES (S&P500 Futures), the book is more liquid, its more rare to see these scenarios, but it can happen, the tell on the S&P500 is that the resting orders drop off even more. Assuming average in May was about 50-70 at one tick, now it might be 20-35.

ATR (Average True Range) Expansion or Contraction

The ATR tells you objectively what the market is actually doing — not what you think it should be doing, not what feels right. It’s one of the cleanest regime indicators available precisely because it removes subjectivity.

I use a 20-period ATR as my baseline read across timeframes. On the ES 1-hour chart, the difference between regimes is immediately visible. The yellow blocks — the compressive, low-volatility periods — show an average hourly ATR of approximately 15 points. The blue blocks — the current elevated volatility regime — show an average of approximately 30 points. Double. That’s not a subtle difference. That’s a completely different game requiring completely different parameters.

Look at how price reflects this in the chart. During the yellow zones, price grinds along the moving averages in an orderly, methodical fashion — small candles, consistent direction, minimal disruption. During the blue zones, the candles expand dramatically in both directions, the moving averages get crossed repeatedly, and the intraday swings cover in one hour what the prior regime took half a day to accomplish.

The most actionable signal on an hourly ATR isn’t the level — it’s the acceleration. When the ATR makes three consecutive higher readings on the hourly (each bar’s ATR is higher than the prior), the regime is actively shifting. That three-bar acceleration in ATR, combined with a price candle that breaks a key structural level with expansion volume, is the earliest possible confirmation that the tape has changed character.

On your chart, you can see this clearly at the transition from yellow to blue: the ATR begins climbing before the price makes its largest move — the ATR is leading the price action, not lagging it. That’s the signal most traders miss because they’re watching the price and not the ATR.

What does normal look like? ATR

The 1,600-point NQ weekly move on June 5th week was a 5-6x expansion from the prior regime's weekly ATR average. That's not a trading event — that's a regime declaration.

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Claude responded: What Changes When the Market Condition Shifts

What Changes When the Market Condition Shifts

Risk management is the foundation regardless of market conditions — but it becomes the entire conversation during a regime shift. Understanding your risk in faster and slower moving markets isn’t about being conservative or aggressive. It’s about capital preservation and staying in the game long enough to capture the opportunities the new regime creates.

There are four things I reconsider every time I identify a condition shift:

Stop size. Position size. Trade frequency. Targets and expectations.

Stop Size

In a high-volatility regime the swings are more aggressive, which means stops need room to breathe. On ES, I normally use 4-5 point stops. In elevated conditions I move to 5-6 points — not a dramatic change, because even with increased volatility, ES slippage doesn’t multiply dramatically. Manageable adjustment.

NQ is a different story. Normal conditions: 17-20 point stops. High-volatility conditions: 25-30 points minimum. NQ liquidity drops significantly in volatile sessions — the DOM thins, the footprint shows gaps and single prints, and slippage in the morning session specifically can be significant. If your stop isn’t wide enough to account for that, you get taken out of valid trades by noise rather than by being wrong.

Position Size

Since I’m not doubling stops, I don’t need to obliterate position size — but it does come down. I reduce to approximately 60-75% of normal size in high-volatility conditions.

If I normally trade 20 contracts, I drop to 14-15 in these conditions. Still enough size to trail runners and capture extended moves, but not so much that a wider stop creates an outsized loss on a single trade.

If you’re trading under 3 contracts, your sizing options are limited — which means selectivity becomes even more critical. You can’t reduce size meaningfully, so you have to reduce frequency instead. Only the highest-probability setups at the clearest structural levels justify pulling the trigger.

Trade Frequency

This is where most traders make their biggest mistake in volatile markets. The market is moving more, so they think they should be trading more. That logic gets expensive fast.

Higher volatility means more movement — but it also means more noise, more failed setups, and wider stops on each attempt. A normal day of 5 trades with 4-point stops becomes a very different P&L equation if you take 8 trades with 6-point stops and half of them fail.

The counterintuitive reality: volatile conditions reward patience more than calm conditions do. Because the market is moving significantly, your key level is going to trade multiple times throughout the session. You don’t need to take every approach to it — you can wait for the one with the clearest confirmation, the heaviest absorption, the most obvious order flow signal. That one trade in a volatile session can deliver what five trades delivered in a slow one.

The positive side of volatility is that you have more opportunity throughout the day — which means you can afford to be selective. Wait for everything to line up. Not all levels need to be attacked because you want to force a specific P&L today.

Targets and Expectations

Volatile markets make traders greedy. You’re watching 100-point NQ moves happen intraday and suddenly every trade has to be the one that captures the entire swing. That mindset is how you turn winners into breakevens and breakevens into losers.

My expectations are set before I enter — not adjusted mid-trade based on what the market is doing at any given moment. The core question: can I get 2R out of this trade? Are there structural roadblocks between entry and target?

In high-volatility conditions, the main benefit isn’t that the trade goes further — it’s that the trade gets to your target faster. A 10-point ES move that used to take 45 minutes now happens in 8 minutes. That compression of time is the real edge, not chasing for 3x the normal target.

That said — with slightly wider stops, I do expect to see more return. The key levels that act as major targets are farther away in a volatile regime, and they have a higher probability of trading because the market is covering more ground per session. The math works in your favour if you let it.

The trade below demonstrates all four factors working together.

First entry — a calculated short at a clear structural level with a slightly wider NQ stop. About 20% of the position gets stopped on the initial push into the highs before the market rolls over. That’s the wider stop working as intended — keeping you in a valid trade through the noise.

The first target is the prior buy-side fight zone around 29,640 — approximately 80 points from entry, which is already 3.2R. The major target is the extreme buy-side area between 29,580 and 29,610 — 150 points from entry, 6R. The entire trade played out in under 10 minutes. The market ran significantly beyond both targets.

Two hours later, the same level retests. Same structural area. Even more confirmation this time — clear absorption, heavy flow into the zone. No scrambling required. No forcing a trade in between. You simply waited, let the setup come back to you, and it delivered 120 points — more than enough to call the day done from a single trade.

That’s the discipline volatile markets reward. Not more trades. Not bigger size. Better timing, cleaner setups, and the patience to let the market come to you.

The Recent Changes to My Trading — Low Vol to High Vol

Beyond the general adjustments covered above, I’ve made one specific change to how I operate in the current environment that’s worth sharing directly.

I’m trading significantly less NQ.

Under normal conditions I’m approximately 85% NQ, 15% ES. NQ is my primary market — the one I know best, read most naturally, and have the most edge on. That hasn’t changed fundamentally. But in the current high-volatility environment, NQ’s morning session has become genuinely difficult to trade cleanly, and I’ve adjusted accordingly.

The problem is liquidity. As covered in the DOM section, NQ’s order book thins dramatically in volatile conditions — and in the morning RTH session specifically, there are periods where there are simply no orders on the book at key levels. That creates two problems: slippage that can take you out of a valid trade before it has a chance to work, and head fakes that are amplified by the thin book. NQ in a volatile morning session can push 40 points through a key level before actually reversing and sustaining. That’s not a signal — that’s a liquidity vacuum creating a false move. Even with wider stops, you’re fighting the instrument as much as the market.

So I’ve shifted to ES in the mornings.

Between 9:30 AM and 12:00 PM ET, I’m predominantly on ES. In the afternoon when NQ has had time to settle and the book fills back in, I’ll take 1-2 NQ trades in the afternoon RTH session — but the morning belongs to ES right now.

The reason ES works better in this environment comes down to two things. First, even with a slightly thinner book than normal, ES order flow remains heavy and reactive — large orders at key levels hold their information because the book is thick enough to support clean absorption reads without the extreme noise NQ produces. Second, ES is simply moving more than it used to. What was previously a slow, frustrating instrument — waiting 30-45 minutes for an 8-point move — is now regularly producing 10-15 point trends level to level. That used to be a NQ-only expectation. In the current regime, ES delivers it with cleaner structure and less noise.

When large orders print on ES in this environment they tend to hold true more reliably than NQ — fewer head fakes, better level-to-level respect, more straightforward reads on the footprint. The information is cleaner.

The practical result — last Friday’s session:

Started with two smaller losses — 5 points each. Standard in a volatile morning, part of the process. The third trade ran from 7,401 to 7,422 — a 20+ point move — with the majority of the position exited at 15 points, a clean 3R. The subsequent winners continued the same pattern — on one trade I did get stopped into the high tick on a portion of the position, but the overall reward-to-risk on the trade was 4-4.5R.

That’s the ES in a volatile regime: less chop, better trending behavior level to level, and when the market moves it respects structure in a way that lets you manage the trade cleanly rather than fighting noise the entire way.

The adjustment isn’t permanent. When vol compresses and NQ’s morning liquidity returns to normal, I’ll shift back toward my standard 85/15 split. But right now the market is telling me clearly which instrument to be in — and I’m listening.

It’s not like I’ve abandoned NQ, I’m still watching it and trading it in the afternoons but I need it to settle down and gain liquidity before it becomes reasonable to trade, otherwise it just feels like a gamble if my stop gets taken out 5 points away from where it should be taken out.

What hasn’t changed?

My approach and system remains the same, that’s the great thing about trading based on volume. You have auction market theory through volume profiles and order flow. Those are things that don’t change when you have change in market conditions, unlike indicators.

The levels stay the same, through composite profiles & individual profiles, and so does flow.

The idea behind order flow is to find outliers, just because the size of the orders might change in thinner markets, just means that the threshold for large outlier order flow might decrease. In this current leg it hasn’t changed too much.

If I look at the profiles for Friday’s session, we have the major balance in white. From 7360 to 7455.

Then the minor levels from the overnight profile & the weekly profile. 7400, 7425. If you remember the example above that is where I traded on Friday, those 2 main areas. With that heavy flow still steps in the form of absorption and aggression.

Market conditions change. They always will. The traders who build long-term consistency aren’t the ones with the best strategy for one environment — they’re the ones who recognise when the environment has shifted and adjust before it costs them.

What I’ve shared here isn’t a new system. The core approach stays the same. What changes is everything around it — stop size, position size, selectivity, instrument choice, and expectations.

VIX, order book liquidity, and ATR give you an objective framework to identify the shift early. None of them are complicated. The discipline is in looking at them before the session, not after it.

The specific changes I’ve made — more ES in the mornings, reduced NQ exposure, slightly wider stops, 60-75% of normal size, higher selectivity — aren’t permanent. They’re calibrations to the current environment. When conditions normalise, the calibration reverses.

The market is always right. Your job is to read what it’s giving you, protect your capital, and be there when your best conditions return.

They always do.

DISCLAIMER: All content by Paralia

Trading Desk and Victorio Stefanov is for educational and informational purposes only. Nothing published constitutes financial advice, investment advice, or a trading recommendation. Victorio Stefanov is not a registered financial advisor, CTA, or broker-dealer. Past performance and historical results do not guarantee future results. Futures trading involves substantial risk of loss and is not suitable for all individuals — you may lose more than your initial deposit. All trading decisions are solely your own responsibility. Trade only with capital you can afford to lose.

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All of this the week before June quarterly OPEX & Fed Warsh’s first rate decision and press conference.

This last pullback was thought by many as the correction killer of the AI cycle and the markets, now it may not be over just yet, but the bears are starting to doubt their power. Onward and upward as we’ve been talking about in the newsletter over the past week, just where is the low of the pullback?

A plethora of news flooded the markets this past week, from inflation to South Korea’s circuit breakers and everything in between.

CPI & PPI- Giving the bulls some breath?

The headline CPI figure rose 0.5% MoM and 4.2% YoY, the fastest pace since April 2023. This is the first time we’ve seen CPI above 4% in 3 years. The core CPI came in at 0.2% MoM, below 0.3% forecast and 2.9% YoY. Naturally, energy accounted for over 60% of the monthly increase, considering oil was hanging out around $100 for weeks, it makes sense.

Which is a large distinction for Wash heading into this weeks rate decision & Fed meeting (June 17). It pulls him further away from a cut, but also not directly a hike, leaving a hawkish tone in the markets. If the core had printed above 3%, we might have seen an easier decision.

Below we can see the CPI data from the US bureau of labor statistics.

PPI final demand +1.1% MoM — well above the 0.7% consensus. 12-month wholesale inflation +6.5% — largest annual rise since November 2022. 80% of the goods advance driven by a 10.7% jump in energy prices. Gasoline alone accounted for over half. Core PPI ex-food and energy +0.4% MoM. PPI ex food, energy and trade +0.8% — above estimates.

PPI is the “pig in the python” — wholesale prices that haven’t yet passed through to consumers. The pipeline pressure is real and building. CPI gave Warsh the hold. PPI reminded him it may not last. Together they frame June 17th perfectly: hold now, but the data trajectory doesn’t support staying on hold for long.

Iran — The Week’s Geopolitical Whiplash

The most volatile diplomatic week of the conflict. Markets moved on every headline — often reversing within hours.

Monday: Talks broke down. Trump said the US might be better off “not making a deal at all.” Oil spiked, equities opened weak.

Tue–Wed: Tone shifted. Trump cancelled strikes, said a deal was coming “soon” — “yes, conceptually” on nuclear agreement. US officials confirmed a 60-day MOU framework was mostly agreed, but needed senior leadership sign-off from both sides.

Thursday: Iran reversed. Foreign ministry: “Iran has not reached a final conclusion.” IRGC-linked Fars News denied any approved MOU text. Overnight — Iranian missiles targeted Gulf countries, interceptions in Kuwait and Bahrain. Negotiating and escalating simultaneously.

Friday: Another reversal. Iranian FM Araghchi: “An MOU has never been closer.” Trump then rejected the version Iran leaked to state media as fake: “What they said bears no relation to the truth.”

Crude has fallen sharply — now testing the major balance low that has developed since the conflict began. The $80–82 zone is where a reversal attempt is most likely, with oversold readings already building. Unless a concrete resolution hits, expect support here.

The arithmetic: Brent at $85 vs. the $94 spike on June 5th is already meaningful disinflation. Hormuz fully reopening sends Brent to $75–80 and reshapes the Fed’s July calculus entirely.

Here’s the uncomfortable truth: a concrete deal means one day of 3–5% upside in equities. The ongoing back-and-forth — deal, no deal, deal again — is producing weekly 3–5% swings. For active traders, the unresolved conflict is generating more opportunity than resolution would.

KOSPI — From Circuit Breaker to Circuit Rip

South Korea sits at the epicentre of the AI semi trade — Samsung and SK Hynix make up more than half the index. It doesn’t fully dictate US markets, but it’s the clearest real-time read on semi sentiment globally. This week’s action was telling.

Monday: Circuit breaker to the downside. KOSPI -8.29% to 7,484. Goldman estimated ~$62B in total foreign net outflows by end of May. Foreign investors sold another $801M on Monday alone.

Tuesday: Full reversal. Samsung and SK Hynix both +6%. KOSPI 200 futures surged 5% — circuit breaker to the upside. SOX rebounded 5.6% overnight.

Jensen Huang — in Seoul for a four-day visit — delivered the line the market needed: “The future of AI is incredibly bright. No matter what happens in the stock market, you should be happy because you can now buy at a discount.” NVDA simultaneously announced AI cooperation agreements with SK Hynix, LG, and Naver.

Circuit breaker down Monday. Circuit breaker up Tuesday. That’s what a capitulation bottom looks like.

The question heading into next week: can the KOSPI reclaim and hold above the 21MA and build toward new highs? If it can, US semis follow. The structure is there — the confirmation is still needed.

SPCX — The Largest IPO in History

SpaceX listed on the Nasdaq June 12th. Priced at 135, opened at 150, closed at 166.84— up 19% on day one. Valued above $2 trillion. $75B raised. The largest IPO in history. We talked about the settlement of around 160-170 yesterday in the newsletter, it’s an over hyped play that too many new retailers thought would explode even more.

Trading was delayed 30 minutes due to intense prediction market activity. Broader market caught the sentiment bid — Dow +0.70%, S&P +0.50%, Nasdaq +0.31% — driven by the SpaceX debut and renewed Iran deal optimism.

The day-one pop absorbed most of the retail enthusiasm and the broader market held rather than broke. But the real test is the passive rebalancing that unfolds over the next 6 months — S&P 500, Russell 1000, and Nasdaq-100 index funds must mechanically acquire their required float. That structural selling pressure on MAG7 names has started. It just started quietly.

The Lockup Calendar

Every date is a known supply event. Early investors are patient — until they aren’t.

• Aug–Sep (Q2 earnings): Up to 20% released + 10% performance trigger (already hit at $160.95 vs $135 IPO). Up to 30% of locked shares potentially hitting simultaneously.

• Aug 21–Oct 25: Five tranches of 7% each at 70/90/105/120/135 days post-IPO. Mechanical supply every few weeks through late October.

• Oct–Dec (Q3 earnings): Another 28% — largest single earnings-triggered unlock, into the seasonally weakest quarter.

• Dec 9 — Full lockup expiry: The remainder. Facebook fell 50%+ before its lockup expiry. Uber dropped 40%. The pattern is consistent.

Until August, SPCX trades in a structural void — thin float, high retail enthusiasm, no insider selling. That’s where stocks run well above fair value. The leveraged products launching Monday accelerate it.

Leveraged Products — June 15th

Three products launch on Cboe Monday:

SPCU — Defiance 2X Long SpaceX, daily reset, synthetic via swaps and options. SPCH — Leverage Shares 2X Long. SSPC — Leverage Shares 2X Short — the first instrument to short SPCX.

The dynamic: Three leveraged products into a 4.3% float is the KOSPI playbook on a $2T market cap. SPCU demand forces dealers to buy SPCX to hedge — mechanical buying amplifying moves higher. SSPC gives institutions their first clean short — dealers must short the underlying to hedge. Combined gamma in a thin float = volatility explosion in both directions.

SPCX must hold above $135. Below IPO price, “greatest IPO in history” becomes “failed IPO” — and that narrative shift feeds on itself fast.

The Week Ahead — June 16–17 FOMC + June 18 OPEX

Warsh walks in with headline CPI 4.2%, core CPI 2.9%, NFP 172,000, oil off the highs, SPCX listed, and Iran negotiations active. Core at 2.9% is the escape hatch — energy is not the Fed’s to fix. It hands him a hold with a hawkish lean.

Base case: Hold at 3.50-3.75%, hawkish statement, dot plot shifts higher without explicitly flagging 2026 hikes. Warsh defines himself as data-dependent without triggering panic.

Risk scenario: Warsh flags a July hike. Long end sells off, semi recovery dies, MAG7 de-rating restarts.

Watch three things: the 2026 median dot, inflation trajectory language, and whether Warsh frames Iran/energy as transitory or structural. Those three signals decide whether this week’s recovery is a base or a dead-cat.

June 19 — Quarterly OPEX (Triple Witching)

June OPEX falls Thursday June 18th — shifted from standard third Friday due to Juneteenth. Highest-volume expiration of H1 — stock options, index options, stock index futures, and single-stock futures all expiring simultaneously.

The sequencing is everything. FOMC drops June 17th. Triple witching hits the very next session. Whatever direction Warsh moves the market gets amplified into the OPEX close — dealers delta-hedging at key SPX strikes (7,400 / 7,500 / 7,600) in both directions. Dovish = mechanical buying into close. Hawkish = dealers sell into the decline, amplifying the move.

After a 3-sigma down day June 5th, the largest IPO in history June 12th, and a new Fed chair’s first statement June 17th — June 18th OPEX has the conditions to be one of the most volatile single sessions of the year.

MAG7 & Big Tech

MAG7 is not broken. It’s de-rated, over-capexed, yield-sensitive, and caught in the crossfire of SPCX positioning and AI ROI skepticism simultaneously. (I’ll go into greater detail about this in the video & below).

The capital that left didn’t go to cash — it went to semis, memory, energy, and SPCX. Those trades are now mature: semis up 80% since March, MU at $1 trillion, SPCX listed. The rotation from MAG7 into “AI infrastructure pure plays” has played out extensively.

The next phase question: does the cycle now favour the hyperscalers themselves — the ones whose AI spend is beginning to show up as revenue — over the infrastructure providers who’ve already run? If AI monetization starts materializing in Azure, Google Cloud, and Meta’s ad ROI from AI tools, the capital that rotated out of MAG7 into semis rotates back — and the next leg of this market is led by the names that underperformed the first leg.

That’s not today’s trade. The inflation data, the Fed meeting, and MU earnings all need to clear first. But the setup is being built in plain sight — MAG7 at 15-32% off highs, multiples converged with the broader index, businesses fundamentally intact, and $75B in SPCX positioning that no longer needs to be funded by selling anything.

The correction that looked like MAG7 dying might be the reset that sets up MAG7’s next leg. The market just needs a reason to believe the ROI is coming. Goldman Sachs wrote: “investor willingness to endorse substantial capex upgrades will likely depend on the path to AI monetization and underlying cash flow strength.” That path becomes visible in H2 2026 earnings. Until then, semis and memory hold the front foot — and MAG7 builds its base

Indexes ( )

All 4 major index ETFs have closed above their 21EMA this week. IWM and DIA had an easier path as their pullback was relatively limited, along with IWM hitting a new ATH.

The most important factor was QQQ and SPY closing above their 21EMA this week.

RSP (equally weighted SPY) printed a new ATH, breadth is going strong now, and IWM into highs is telling us that this is not a major top, and the path forward is looking more attractive, however how will we get to our 810 SPY target?

The path is starting to get more clear, but it may not be the V-bottom the bulls are waiting on, in fact, it’s most likely going to be a struggle, especially since we’re coming into a super eventful news week.

As things stand, watching the expansion above 745 on SPY would trigger more of a buy move, otherwise the expectation is chop within the balance (730-745). The 50EMA on SPY & QQQ held extremely well which keep the power trend intact.

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The NQ futures rallied nearly 2% on the news in a matter of minutes, climbing about 570 points and ES 1.55% rallying about 110 points. However the question is, will this news be sustainable enough to keep the buy side on to close out the week and actually bottom?

I’m skeptical of that, in that I don’t fully believe we’ve seen the bottom, and there is one way to prove me wrong, it’s by a follow-through. In that both & close above their 21MA. Otherwise I’m forced to believe we tag the 50MA first.

Trump went onto say that “the final deal points had been approved by all parties involved” yesterday, something that has been stated over 30 times now. Yes, 30 + times. Which has caused the market to rally, but nothing concrete has been seen from these deals. Especially in the current market conditions, we’re most likely going to see this get reversed and then some, I need not remind you of last Friday. The back and forth of acceptance and denial is just babble to move markets it would seem, so let’s see how real that is to end the week.

Oil got crushed yesterday, hitting $84.XX for the first time in weeks, and we might be trying to break the oil balance low, that is if this “deal” news can materialize. It’s especially important considering the inflation data that we saw this week.

Headline PPI came in at 1.1% MoM — well above the 0.7% forecast. Annual PPI hit 6.5%, the fastest pace since late 2022. Nearly 80% of the May advance was driven by a 2.8% surge in goods prices, with unprocessed energy materials jumping 6.9%. The Hormuz closure is moving through the entire production chain.

The pipeline number is the real concern. Stage 2 intermediate demand — goods mid-production — rose 12.5% over the past 12 months, the largest advance since September 2022. That’s what’s coming into consumer prices over the next quarter.

The one relief: the PPI components that feed directly into PCE — the Fed’s preferred inflation gauge — came in softer than expected at 4.9% vs. a 5.4% estimate. Same story as Wednesday’s CPI — energy running hot, core offering just enough cover.

The Fed holds next Wednesday. Tone stays hawkish. The dot plot is the only thing worth watching at the FOMC. Current market participant expectations are that the Fed holds this year, but inflation is still running really hot, just because it’s below their estimates, doesn’t mean their estimates aren’t 2 times higher than their target.

Big News - SpaceX IPO

Yesterday, I broke this down in length, so I’m not going to do that again, but SpaceX is going to launch officially today. One of the most anticipated IPOs and we’re going to see it’s effect on markets today.

I suspect we’re going to get a lot of activity in the IPO which can also affect movement in the equity indexes, ES & NQ.

What we do know, concretely:

The Deal

• $135/share · 556.6M shares · $75B raise · $1.77T valuation · Ticker: SPCX

• Largest IPO in history — Saudi Aramco’s $29B in 2019 isn’t close

Elon Musk — First Trillionaire

• SpaceX stake: $866.5B + Tesla $355–455B = $1.1–1.3T total net worth

• #2 richest (Larry Page ~$330B) is worth less than a third of him

• Locked up for 1 year — cash unlock June 2027

Oversubscription

• $250B+ in demand against $75B raise — 3.5–4x oversubscribed

• Retail orders alone topped $100B — 30% of offering reserved for retail (~$22.5B)

• Most retail applicants got a fraction or nothing — those buyers are now at the open market

Index Inclusion — Not What the Market Priced In

• S&P 500 inclusion rejected for fast-track on June 4 — earliest entry mid-2027

• The $50–100B forced-buying event the market was pricing in is now a 2027 story

• Near-term mechanical buying: $22–27B across QQQ and Russell trackers only

• Watch QQQ and IWM today — both are forced buyers of SPCX at open, could lift NQ

My opinion on today is fairly neutral, I do think they’ll try to pop prices higher from $135 possibly towards 160-170, then settle slightly flat to up. The immediate euphoria that will flood the stock might not outweigh the reality of the largest IPO ever and it’s overvaluation.

Regardless, I have no stake in the name, I won’t be trading it, I’ll probably wait to see several quarters of earnings before getting active. It may just rocket higher for the next few days even and more.

ES Futures Breakdown:

It’s Friday, I’ll share my thoughts on the ES to wrap up the week. Euphoria stuck the market yesterday and pre-market today, we’re on a wave higher, but can it be sustained? I wouldn’t be so sure just yet.

Yesterday’s news triggered the bid. We held above 7,300, pushed into the higher balance, and closed between 7,355–7,360. Overnight momentum carried higher and price has pushed close to the current balance top at 7,453 — with 7,473 as the next area that could be included as resistance. These are the immediate barriers.

The buy side looks constructive — but without acceptance into higher value, this is still just a range move. Value higher starts at 7,500 and really asserts itself above 7,518–7,520. A close above that zone would be the confirmation the bulls need.

To hold bullish momentum today:

• 7,422–7,424 needs to hold bid for the next leg above 7,453 and eventually 7,473

• 7,400–7,405 is the deeper support — hold there and the buyer still has a path through 7,425 and up to the balance top at 7,453

• 7,355 is the balance low — not where you want price to go, but where you’d look for a fade long if it does

The risk: The sell side hasn’t tapped out. Failed expansion at 7,453 or 7,473 flips this into a reversion lower — these are balance tops, and price rejecting them is the higher-probability scenario until proven otherwise. Pure sell fades above sit at 7,500 and 7,520.

Acceptance above 7,520 changes the structure. Until then, trade the range.

SPY & QQQ Breakdown:

The path forward for our swings isn’t an easy one. As markets drop it’s hard to go full tilt and head first into longs with several 2-3% down days in a span of a week.

That’s why I talked about nibbles on longs in our favorite swing names and leverage before we get confirmation. Several of those swings are already up fairly well, and some even 30% in a matter of days. It just sits a little easier on the soul if we can get a little more confirmation to increase size.

That confirmation might come out today or next week.

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The market truly is a concoction of emotions and unexpected behaviour.

lists on the Nasdaq tomorrow at $135 per share, 556.6 million shares, raising $75B at a $1.75T valuation. The largest IPO in history by a wide margin.

The market has already paid the price of admission, given the sell off we’ve seen. This sell of has been driven by economic data, starting with last Friday’s NFP and partly by institutions liquidating tech and semi holdings to free up cash for SpaceX allocations.

The money for the $75B raised has to come from somewhere, and it came from existing positions.

Why does the market have to make room for it?

IPO allocations are paid in settled cash, not margin. When SpaceX prices $75B in shares, every institution receiving an allocation has 48 hours to wire funds. That cash has to come from somewhere. The most liquid names with the deepest order books (mega cap tech and semis) are always first to be sold.

When enters the S&P500 or Nasdaq 100, inevitable at $1.75T, every passive index fund on the planet is forced to buy it automatically. Their mandate requires it. But the initial public float is only ~3% of shares outstanding. Passive money chasing index weight is competing over an extremely thin supply of stock, driving the price up mechanically regardless of fundamentals. To fund that purchase, every existing index holding gets trimmed proportionally. The bigger SPCXs benchmark weight, the bigger the haircut across every name already in the index.

SpaceX spans aerospace, satellite communications, and AI infrastructure. Once it enters major indexes, funds that are already overweight tech become even more overweight overnight — forcing additional selling in adjacent names just to stay within mandate.

Now multiply all three effects by three. Anthropic filed June 1. OpenAI filed June 8. SpaceX prices tomorrow. Three companies worth a combined ~$3.5 trillion are hitting public markets in the same quarter. The cumulative cash and reallocation drain has no historical precedent. The market hasn’t been selling on bad news — it’s been making room on the calendar.

Demand Flood

The book is 4x oversubscribed. Bloomberg reports $300 billion in orders against a $75 billion raise, with multiple institutions submitting individual orders exceeding $10 billion. On the surface, extraordinary.

The counterintuitive problem: over subscription only creates post-IPO price surges when there’s a large pool of disappointed buyers left out who chase the stock on open. At this raise size, a 4x ratio means most serious bidders already got meaningful allocations. There are far fewer frustrated buyers left on the sideline to fuel a day-one pop. The bigger the raise, the less the over subscription ratio mean

Expected IPO disappointment?

There’s so much coverage on the IPO and stories of people taking out loans to buy into the IPO, others expecting it to go 2-3x on the first day. Not only is it super over subscribed, but with the insane valuation and early investors, especially those granted stock as part of compensation at SpaceX since 2015, there is going to be a solid amount of profit taking.

We’re literally seeing “overnight” millionaires, on the IPO, there are an expected over 4,000 new millionaires that are going to flood into the markets, regardless of the positive expectations, IPOs carry heavy risk. Often market participants calling the acronym “It’s probably overpriced”.

Several valuation authorities have dubbed the valuation ridiculous. Damodaran’s discount cash flow model pegs fair value around $1.2T which is ~30% lower than the IPO target. MorningStar’s independent estimate came in even lower at $780B, the same prospectus also disclosed a $4.28B net loss in Q1 2026 alone.

Now, everyone has an opinion, and these are some of the risks that the IPO carries, so I wanted to cover some of the potential downsides. This thing can open and rip (I doubt it), but generally IPOs take 8-12 months to settle, get an understanding of what the company internals look like through earnings reports over several quarters and more.

QQQ - recent tech sell

Tech has been getting bled out, it’s not news, but a lot of the MAG7 names haven’t enjoyed much of this rally that we’ve seen. Could they have been attributing the repositioning since February to the SpaceX IPO? It’s possible.

I’ve attached the AAII sentiment survey (from their website) that highlights the percentage of individual investors who are bullish, bearish or neutral in the markets. It works as an inverse indicator. Where when we have over 50% bearish sentiment, we’re at or near bottoms, just like if we have ~50%+ bullishness, we’re near a sell.

The highest bearish sentiment was this year, between March 18th and April 1st, when we bottomed in the market.

Now we’re entering the 50% range, almost as this weeks numbers are ~48% bearish sentiment as the QQQ comes close to the 50MA. A very pivotal area in the market to hold the current power trend, although I didn’t think it would trade this soon without it getting tighter to the 21MA.

This suggests should this bull continue we’re going to enter some choppier seas to the upside, which could mean volatile swings in either direction.

The peak low from current ATH was 8.5% of a pullback, to see back to back 10% pullback in a strong bull market isn’t normal overall, which is why I think that we’re in for a bumpy ride.

I do think we bottom around the 50MA or at least that is where we would want to see if the market can actually stall. The best case is the base forms now on the failure to offer under the balance low of 694 and we pick things up again.

The key here is the move above the 21MA, and fast, otherwise we’re going to chop around here a little more. That is where I would start looking for the swings higher, if you’ve been following the newsletter, we’re still looking for QQQ 800+ in the coming months.

When this SpaceX IPO blows over and some more cash gets freed up, large positioning will look at tech as undervalued, and the AI trade to continue. A lot of AI bubble talk, with the recent raising of capital through dilution has scared the market.

was first, yesterday we saw earnings mentioning that CAPEX surged to $55.7B for the year, and that another $40B of financing is coming in FY2027.

The cash burn is looking really damaging and the market isn’t liking it, however the demand narrative is still growing strong. Shortages into 2027-2028, data centre investments and ideally ROI is going to propel the AI trade further before we really start considering bubble or not. We’re just at the start of it all.

SPY - Full Breakdown & Stock Talk

Another sell the rally day yesterday as we continue to hold under the 21MA. The averages are even curling lower and it’s looking like the 8MA is going to cross under the 21MA as the 50MA is playing catch up.

The likelihood of the 50MA tap is increasing which would be 5.3% from the highs. Not an insane pullback but detrimental to hold if we’re going to continue the power trend.

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Japanese inflation data came out this morning, a little hotter than expected, which is being echoed through Asian markets.

Yesterday was another pretty aggressive outlier event, where dropped 2.8% intraday and 4.9% to the downside intraday. However, and nearly closed unchanged.

(equally weighted SPY) closed green on the session. So it’s just tech getting spanked around while the industry disruptor, Anthropic dropped Claude Mythos 5 & Fable 5 which naturally killed software ( ). To add to that SpaceX IPO is apparently 4X oversubscribed, with iShares launching a 2x leverage fund the same day the IPO drops.

This is going to be a wild Friday people. The expectations are that come Friday, over 4,000 new millionaires are going to be present in the markets off the SpaceX IPO as everyone from engineers to cafeteria workers was granted shares as a part of compensation. Which means, there is going to be turbulence in the market, ideally not to the tune of what the leverage goblins are doing in South Korea.

Anthropic drops Fable 5 & Mythos 5

Anthropic’s most powerful model — Claude Mythos — has been locked inside a restricted government program since April, limited to AWS, Microsoft, Apple, and CrowdStrike due to its ability to autonomously discover and chain zero-day exploits. Today they brought a version of it public.

The public gets Fable 5 — Mythos-class capabilities with guardrails, falling back to Opus 4.8 on high-risk queries. Vetted cyber partners get Mythos 5, the same engine with the guardrails lifted.

The numbers speak for themselves: 80.3% on SWE-Bench Pro vs GPT-5.5’s 58.6%. Stripe compressed two months of engineering into one day. IMC reported it aced their trading-analysis evaluations across the board. Free for all paid subscribers through June 22, then $10/$50 per million tokens after.

The timing isn’t accidental — Anthropic filed for IPO June 1 at a ~$960B valuation, OpenAI filed this week, SpaceX debuts Friday. Fable 5 is the proof-of-product moment before the public markets scrutiny begins.

AAPL continues to get crushed, but some main tech names took to the rebound into the end of the day, might we say the stronger names? rallied over 4% after breaking 200 temporarily and up over 2% from the lows, still wasn’t able to break this range low to get to 350. However this does put upside pressure in the names, as long as we’ve bottomed in markets, the stronger names are going to hold a better bid. Question is have we bottomed? Let’s discuss.

The main event was CPI data this morning, image taken straight from Financial Juice.

Headline CPI came in exactly as forecast at 4.2% YoY, up from 3.8% in April — the highest since May 2023. No surprise. Energy is still the driver, with crude up roughly 62% since the start of 2026 on the Hormuz situation.

The more interesting number is Core MoM at 0.2% — softer than the 0.3% expected. That’s the one the Fed watches, and it came in light. Small relief, but it changes nothing structurally. Zero cuts are priced for 2026 and a hike remains on the table if inflation doesn’t cool.

This was the last major data point before the June 16–17 FOMC. Matched headline, softer core — expect the Fed to hold and stay hawkish in tone.

SPY Breakdown - The road map

SPY is about to knock on the 50MA to the downside, something I wasn’t expecting in this strong expansive trend, it still aligns with the power trend move overall if we can hold the area which is now around 718.

5% of a pullback was not on my bingo card when we identified the temporary top around 760, however that’s the hand we’re dealt and the potential of a more “grindy” upside move is now in play.

The idea was to see how we can move around the 21MA, so far proving to be the ultimate line of defence.

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Meaning, be selective in trading NQ futures, as we opted to trade a bit more ES futures this week and yesterday. The movement is going to be jumpy, choppy and fast.

If you’re trading NQ futures, give it at least an hour off the open to settle and start behaving a little more.

Bank of America ( ) noted that 70% of their recession triggers had gone off yesterday as well as the most bearish market bets that we’ve seen since the 2008 crash were plugged into the market. It seems that one day of outlier harsh sell has everyone flipping to the bear side. Typically this is talk that gets retail fearful while inflows take place in ETFs… I’m not bearish, if anything bullish with a flipped view of the path forth. Let’s discuss below.

It wouldn’t be a daily brief if we didn’t talk about South Korea and what the KOSPI has been up to. We saw that Korea was down to start the week, but has bounced pretty aggressively today, bringing some life back into semis and potential to trickled into the US market today. Up a whole 6% from its session lows, the KOSPI just missed the 7200 area we were interested in (for now at least).

Samsung is up 10.5% from the Monday low, while SK Hynix is up 20%. It’s almost back to highs and it seems like we just can break semis now.

Jensen Huang ( CEO) was in Seoul on Monday, June 8th, damage control it seems. He went on to do a full tour of Korean corporate leadership. He spoke to reporters and told them “you should be very happy because now you can buy at a discount”.

Meaning, buy the dip in AI hardware.

He met with Hyundai and then mentioned that the two companies have formed a “very deep partnership” expanding from autonomous driving into broader mobility and physical AI.

Jensen also stated “Korea will need a large-scale AI factory” and that “every country and every company wants to build AI infrastructure”. He then went onto to inadvertently advertise SK Hynix, asking them to “please make more” memory chips.

It seems like a pretty direct pump, that seems a bit fishy with all of this AI talk blowing up as of late and scepticism of it’s validity and the potential of a bubble at that.

has lagged in a lot of this AI upside many would argue, as it’s being represented more of a “mature” company with it’s slower movement. It’s been getting back down on most expansions.

It’s still at the epicentre of the AI space and there is opportunity as we’ve been talking about throughout this newsletter for the past few weeks.

Back into the 50MA and the distribution block around 202-205 we would want to hold out a base, so that prices don’t come back into the major block around 192.

unveiled it’s new version of Siri AI, powered by own Gemini AI model at the Worldwide Developers Conference (WWDC) yesterday into the end of the day. They unveiled that the AI would enable users to have back-and-forth conversations and complete tasks.

Analysts had predicted that the monetization could boost share prices by $75-$100 if it delivered. What they got were some impressive demos and a “coming later this year” with no firm date on the launch.

In a market where every AI company is moving fast and shipping, AAPL just plopped another promise which punished AAPL into the end of day. AAPL was one of the only MAG7 names that was holding out into ATH pretty well but this news drove prices lower into the close of the session.

Just like with most AI, we need to get results ASAP to really justify the spend and investment.

SPY - The Hybrid Bull Market Expectations

Yesterday SPY attempted a bid into the 21MA and was quickly dismissed, failing at 745 or so, the top of the developing balance that we’ve got right now. Which suggests that the rebound might not be as vicious as we had hoped for. That doesn’t dimiss the upside and bull market however.

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The KOSPI hit another circuit breaker to start the week, down over 7% off the open, with Samsung down 10% (despite trying to climb during the session) and SK Hynix down 10% as well (this name actually closed the gap before falling).

It’s not as if the market isn’t trying to get saved, Jensen ( CEO) was on full pump patrol last night and this morning, with Trump even attributing good news to the markets.

Polymarket was quick with the news, Jensen announces NVDA is partnering with LG on humanoid robots & next-gen data centers.

Bloomberg mentioned that Jensen calls the global tech selloff from Friday a buying opportunity, saying that the buildout of AI has just begun.

The US pump started too, with Trump saying the Trump Admin might buy equity stakes in US AI companies and that he will host a meeting with AI execs as soon as next week. Also citing stocks should go up, not down. Along with a deal with Iran this week, as per Reuters.

Trump also cited saying Netanyahu would have to accept a US deal with Iran, per the Financial Times.

With that US equities on the overnight held out their lows from Friday and had attempted to start their rally. NQ Futures up 1.65% from lows and ES Futures up 0.92% from lows, holding the distribution bottom around 7360 we noted in the newsletter last night. The main target, is still holding the first area of interest 560 or so, up pre-market on some of this pump news.

The ETFs (SPY/QQQ) are still under the 21MA for now, as we charge into the start of the week.

As we see below, the SPY is trying to gap up it’s hardest going into the Monday open, but there is a long path ahead, should we see the true turning point from this large sell off.

This week in news, we anticipate CPI data on Wednesday, pre-market. This is going to be an important read as we’re anticipating stickier inflation with high oil prices, going into a potential hawkish Fed event this month. PPI out the following morning on Thursday.

Then Friday, SpaceX IPO is set to hit the markets which can cause some turbulence.

All in all, expectations for volatility this week are heightened and we have to be cautious of that, more news and tape bombs throughout the days as well as opportunity for us intraday traders.

SPY Breakdown & thoughts to start the week

Yesterday evening we talked about the two potential paths going forward.

This week we’ll see if the buyer wants to revive the current move, which would be above the 21MA. This would trigger the continuation in the best way possible in the current standing.

The bottom band of the balance that we’re in currently is 728-730 which still has potential to play out. It would be ideal for the buy side if we don’t get too much past the lows printed Friday.

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Friday wiped out $1.75T from the US stock market (SpaceX IPO market cap…wink wink). The Nasdaq had it’s worst day EVER (points wise) dropping over 1600 points from Thursday’s close and 5.4%.

However, it’s been a pretty strong week at Paralia, we ended the week on a good note Friday, riding out some of the downside and now starting to scheme the next plays and market set up. (Check it out here)

This kind of volatility might scare people, especially position traders, swing traders etc, but we’re about to get blessed with opportunity intraday! You don’t want to miss it.

I’m still giving away 2 FREE Newsletter Subscriptions for a 30-day period. All you have to do is message me on Substack or Discord.

The current full community access is still 16% OFF…

Last week we did talk about a pullback and how the first 2 weeks of June can present just that but damnnnn, this wasn’t in the plan, that’s what the market does. The 21MA was terrorized and we closed 2% below in QQQ and 1% below in SPY.

(SPY chart on the 15-min)

Is it over? Is this the end of the bull run, in short no. A nice fleece liquidation based on the current grind higher was need (in my opinion). The bears who’ve been short the whole way up are clapping their hands, celebrating their -90% position going to -70% on Friday. Last weekend I talked about several potential risks to the start of June and it seems like most of them have been triggered throughout the Friday sell, now it might seem like the remaining risks are surrounding earnings as well as some other things we’ll discuss.

So where do we go from here? What’s the outlook? Potential reasoning for this monster drop?

All will be covered here and in this weekend’s video. Strap in, we’re dissecting.

The big news was this past Friday, and there are several potential catalysts that could’ve triggered the move and are things that I would watch in the coming weeks as well.

The NFP print & Warsh’s first FOMC meeting:

The primary trigger. May jobs report: 172,000 added — more than double the 80,000 consensus. CME FedWatch odds of a 2026 hike jumped from ~50% to 57-58% within minutes. 10-year spiked to 4.54%. Cleveland Fed’s Beth Hammack posted on LinkedIn hours later: “persistently high inflation is the bigger concern — it may soon be appropriate to act.” The rate cut consensus that ran all of 2026 died on contact with the data.

The cruel nuance: average hourly earnings +3.4% YoY — lowest since 2021. Strong hiring + real wage compression + hot PCE = stagflation confirmed in one release. One caveat: firms cited the FIFA World Cup beginning June 11 as a likely hospitality hiring driver. Markets don’t trade caveats on print day.

Warsh now walks into June 16-17 with a blowout jobs print, core PCE at 3.3%, oil at $92, and a bond market pricing a hike. Every new Fed chair faces an early probe of inflation credibility. His first statement is almost unavoidably hawkish. The easy FOMC he needed doesn’t exist anymore.

AVGO ER & Semis breaking:

AVGO beat estimates but didn’t raise its long-term AI revenue outlook — flat forecast, sector-wide reality check. Wednesday whisper miss became a full semi unwind by Friday. NVDA closed at $207.22, down nearly 8% from June 1st. Wells Fargo: “more driven by positioning than fundamentals — sector was way overbought.” SOX up 80% since March 30th. The fuel had been building. AVGO lit the match.

When the company custom-designing chips for Google, Meta, Apple, and ByteDance doesn’t raise forward AI revenue guidance, the market doesn’t read it as one company’s problem — it reads it as a demand signal for the entire infrastructure build out.

has dropped over 20% from the ATH, due to the earnings report we saw last week and now under the 50-day moving average, which would take some basing out and time to get this back to attractive levels to buy, we’re around the distribution are 385 to start, but to hold above 400 would be a healthier start.

MU ER — June 24th: The Next Binary

Q3 guided to $33.5B (+263% YoY), gross margin ~81%, EPS $19.15. Street at $33.8B. Stock tripled YTD, crossed $1,000 for the first time June 1st. The bar is extraordinary — Q3 guidance alone exceeds MU’s entire annual revenue from any prior fiscal year.

The AVGO template is the risk. Print in line → sell it. Q4 guidance above $40B validates the HBM supercycle. Anything softer confirms AVGO’s reality check extends to memory.

The calendar makes it worse. MU reports June 24th — eight days after Warsh’s FOMC, twelve days after SpaceX lists. Three macro events in twelve days. Each one sets the table for the next.

is still above the 21MA, despite the most recent large downside move, and we’re going to look at this as an opportunity long again, relatively soon once Korea settles. We had a 100%+ move on not long ago, and I talked about risking off heavily, now we’re just looking for that next leg higher.

South Korea’s over-leverage

KOSPI plunged 6.4%, triggering a circuit breaker. Samsung -7%, SK Hynix -9.92%. Two stocks accounted for 72% of the KOSPI’s 109% six-month rally and 54% of total market cap. When the semi narrative cracked, there was nowhere to hide.

The structural fragility: margin loan balances at a record 38 trillion won (~$5.6B). Single-stock leveraged ETFs captured 21% of total market volume within five days of listing — negative gamma amplifying every tick lower. Samsung leveraged product -13%. 2x SK Hynix product -20%. Foreign investors had already net sold ~$22B in Korean stocks since May. Forced liquidations hit a YTD high before Friday even opened. The Finance Minister flagged “herd mentality” and leverage risks — warning actions would be taken.

The irony: Korean retail was partly selling leveraged chip ETFs to fund SpaceX IPO subscriptions. Mirae Asset’s SpaceX offering sold out within minutes. The hottest new trade cannibalized the trade that made them rich — on the same day.

Jensen Huang landed in Seoul Friday afternoon for a four-day visit. He walked in as SK Hynix — his primary HBM supplier — posted its worst session of the year.

CTA repositioning & Quarter End:

CTA exposure at the 88th percentile of historical positioning, deeply long after buying $53B in global equities over the prior month, after a record nine week run, it seems the dam broke. When CTAs hit exit triggers, they don’t negotiate. We saw that cascade Friday.

Goldman Sachs talked about this early June, they estimated that trend-following funds currently hold approximately $93B in long global equity exposure after increasing positions by nearly $3B at the end of May. About $34B tied to S&P500 futures. This super elevated level of buying had the potential of widespread mechanical selling. They talked about even more increases in positioning if the market remained flat, but this mechanical sell off was triggered, towards the end of the quarter.

June 30th is coming up, after a quarter of tech and semi non-stop buying that drastically outperformed bonds, estimated that $25B+ in pension selling into month-end last week alone, quarter end is a larger version of the same dynamic.

SpaceX IPO: structural liquidity drain

Not Friday’s trigger — but the overhang making every trigger hit harder. SpaceX filed its SEC pricing at $135/share on June 3rd — $75B raise, $1.75T valuation. Roadshow began June 4th. Listing June 12th.

Cash hoarding and outflow of global liquidity ahead of the SpaceX IPO added directly to KOSPI weakness. SpaceX, OpenAI, and Anthropic together expected to absorb $240B+ by year-end. MSCI flagged in February that megacap IPOs in 2026 would trigger index-driven flows, sector rotation, and a compression of liquidity across everything outside the new names.

Institutions need to raise cash for allocation — they sell what they own. NVDA, AAPL, MSFT, META, AMZN. Motley Fool published a piece on June 5th titled “News Flash: You Are the Exit Liquidity for the SpaceX IPO.” Musk reserved up to 30% for retail — three to six times the industry norm. The distribution mechanism is explicit.

Why would I be so focused on South Korea this week & in coming weeks?

South Korea sits at the centre of the global AI infrastructure supply chain, the two stocks that dominate the KOSPI are Samsung and SK Hynix, that make the memory chips that make AI possible. I could write a whole article around this alone, but we’re going to keep it short and sweet here.

When the KOSPI bottoms and holds — it’s telling you that the largest HBM suppliers in the world have found a price level that institutional buyers consider fair value for the AI memory cycle. That’s not a local signal. That’s a global demand read on whether the hyperscaler capex cycle is intact or broken.

When the KOSPI builds a higher low — it’s telling you foreign institutional money is returning to the single most concentrated expression of AI infrastructure demand in any public market in the world. $22B in foreign net selling since May has to reverse before the full AI infrastructure thesis re-rates globally.

There is a huge concentration where those 2 names represent over 50% of the KOSPI and a lot of retail traders are several X long leverage in those names and the Korean market.

Just like that over the weekend, good news comes out of Korea to help hold the names. NVDA CEO Jensen Huang and SK Chairman Chey to reveal cooperation plan on Monday (from Newsis, reported by FinancialJuice).
Jensen also said the memory shortage to continue for several years, and he’s also set to meet the Samsung Vice Chairman Jun tomorrow.

If we didn’t get some kind of catalyst over the weekend, we would expect a larger drop and circuit breaker in the KOSPI which would drive US equities lower. Right now it’s the one to watch. When we bottom on KOSPI, the US market most likely bottoms and we start to see money flowing back in for at least a higher low in SPY.

Good news from Jensen, Samsung and SK Hynix is needed and the MU ER beat and run would help.

It’s relevant to watch for the US markets because the Asian markets open first, around 13 hours before the US open. Since they’re just a large player in the AI space, they can dictate the strength or weakness in US markets as well. A stable KOSPI to start the week tells us that the AI infrastructure thesis is still in tact.

The $22B in foreign selling went to cash — not away. When those flows reverse and institutional money returns to Samsung and SK Hynix, it signals the AI memory supercycle is intact at new prices. That conviction shows up in NVDA, MU, and MRVL positioning within 24-48 hours.

The leverage unwind has to exhaust itself before the bottom is in. 707.7 billion won in forced liquidations, 2x leveraged ETF cascades, record margin calls — none of it stops until the last margined retail position is cleared. The signal isn’t a headline. It’s a KOSPI session that opens lower, absorbs the selling, and closes flat or positive — passive buyers taking the other side of the last forced seller. That’s the structural bottom. Everything else is noise until that happens.

There are 2 areas to watch in the KOSPI in the coming week, the 21MA is coming out around the 7850 area, which can be saved, unlike the SPY on Friday. If this good news continues.

Then we have the catch up of the 50MA which I’ve drawn in blue, where we could see 7050-7200 bottoming, which would trigger fast I think, with circuit breakers along the way if we don’t find reversals soon. That would trigger the bottom most likely and bottom in equities.

News galore this week, this is what we should keep in mind starting the week off:

SPY as it stands, and the path.

The video breakdown and more of a deep dive will be released either later tonight or tomorrow pre-market.

This past week we focused heavily on the potential pullback to the 21MA in SPY, which not only came, but broke clean through, which now presents the risk of actually holding it resistance, in 1 day, the market gave back 2 weeks of gains. SPY broke into a major distribution we were watching closely for the pullback.

Between 729 and 744, looking for the pullback to hold around 745. Closing the week out at 737.55.

Many a market participant are looking at this and thinking we’ve broken the upside bull market and it’s over. Pulling back a whole 3% from ATH. We’ve seen these moves in the past, where we get an overextended downside move like August 2025, in 2021 as well.

Rather than thinking that it’s all over I see this as just a potential change in the expected path forth, with targets still above 800. However, buying into this super aggressively, loading 100% leverage isn’t the current play.

There are 2 narratives we are looking for:

• The immediate rally and close above the 21MA

• The developing new bottom of the pullback

This last Friday was a ~3-3.5 sigma event in the SPY, which means the odds of that happening were roughly 1/2200 trading days, or about once in every 8-9 years.

To give you some comparisons.

Black Monday, October 19, 1987 was a 20 sigma event, Dow fell 22% in a single session.

COVID Crash, March 16, 2020 was a 6/7 sigma event, SP500 down ~9% in a day.

Tariff Monday, April 2025 was a 5 sigma event, SP500 down nearly 5% in a day.

What Typically Happens After 3-Sigma Days

1–5 days: Mild mean-reversion bias — oversold conditions attract dip buyers. But vol-control strategy deleveraging continues for 5–10 sessions after the spike. Expect choppy, not a clean V-bottom.

1–3 weeks: The retest. The most common pattern after an isolated 3-sigma event: bounce → retest lows → base → recovery. The retest is where the real bottom gets established — retail either capitulates or builds conviction.

1–3 months: Entirely depends on whether the catalyst resolves. Black Monday recovered 23% in a year. COVID lows recovered 100%+ in 12 months. April 2025 tariff shock recovered to ATH in 8 months. The common thread: recoveries are fast and violent when the catalyst resolves. Slow and grinding when it doesn’t.

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It seems like AVGO earnings effect trickled into Asia as South Korea’s KOSPI was hit over 6%, triggering a circuit breaker. Korea has become the leveraged proxy for semiconductors. Samsung down over 7% and SK Hynix down over 9%.

Samsung carried a second problem — the union confirmed it would proceed with strike action, layering supply disruption risk on top of the AVGO demand miss. Foreign investors recorded net selling of 2.08 trillion won in the morning alone, while retail absorbed over 2.6 trillion won — classic distribution into weak hands.

The power trend still looks in tact on the volatile KOSPI in Korea, we could see the move hold into the 21MA for the next leg higher as the price waits for the 50MA to catch up.

The Nikkei had already shed 1.36% on June 4 as renewed Middle East tensions pushed Brent toward $99. June 5 extended those losses. A stronger yen compressed export earnings while drawing foreign capital into JGBs, and elevated valuations after a 61.9% rally since April 2022 left the index with little cushion. Tech and semi supply chain names led the decline, tracking the Philadelphia Semi collapse overnight.

This translated directly to US markets. Nasdaq futures rolled over right off the ETH open and continued to plummet, give up all of yesterdays gains and then some. While S&P500 fell as well, it wasn’t as an exaggerated move, because the Nasdaq strength is heavily reliant on on several chip names, rather than all of tech, which we saw had been weak over the last few weeks.

News out of the Middle East

Oil fell over 3% on the news that Israel and Lebanon reached a ceasefire agreement, boosting hopes for a broader deal to end the US-Israeli war with Iran and a potential reopening of the Strait of Hormuz. Which turns into lower inflation expectations due to lower oil prices, yields each and equities catch their breath for an upswing.

The other news that hit was a bipartisan majority in the Republican-led House passed a war powers resolution 215-208 directing Trump to end military hostilities with Iran. The clearest congressional rebuke of the conflict so far. Markets read this as a political pressure building toward a negotiated exit from the conflict. This raised hopes that we could see the next stages of the negotiation, reducing fears of prolonged Strait of Hormuz supply disruption. Trump dismissed it as a “meaningless vote” but the market enjoyed it.

Non-Farm Payrolls Data

It’s the first Friday of the month, we know that means, Non-Farm Payroll data out of the US. (The May numbers)

There are three figures that are going to be released, US Average Earnings, US Unemployment and the headline figure US Non-Farm Payrolls.

The consensus is 88,000, with 115,000 previous (April figure), unemployment rate is expected as 4.3%, as it was in April and the average earnings are expected at 3.4% vs 3.6% in April.

A hot print reinforces the Fed’s case for no urgency to cut rates, a larger number over 100,000 for instance. April CPI already sitting at 3.8% YoY and the next FOMC on June 16-17 priced at 1 96.9% probability of holding rates as is. Strong jobs and sticky inflation means that Warsh and the Fed keep things as is for longer.

A weaker number could spark some growth concerns, while pulling forward rate cut expectations, if we get a number under 80,000/75,000. In the current environment, rate cuts would be a direct tailwind for tech and growth. The Iran war is already a macro headwind, and a weak labor market print would sharpen the argument that the Fed needs to ease sooner than the June hold implies.

We saw a hotter number this morning, 172K vs the 88K expected, and the prior was revised higher to 179K from 115K. Which means that the labor market is running hot, the Fed won’t be urged to cut, which had an immediate reaction to the downside in equities.

Rotation Station: Value steps up, Tech steps back

Dow Jones rallied to fresh all-time highs yesterday, while Nasdaq continues to stall, the index says bullish & healthy, breadth says otherwise.

We’re seeing a fairly textbook rotation out of chip names into non-tech blue chips. led the rally, helped out, with financials, health care and real estate catching a bid, while tech and semis took a red day.

It seems that the market took on a structural transformation this year, marking the end of the MAG7 era of extreme market concentration, transitioning from a regime of “growth at any price” to one where value is actually… valued. That goes for chips as well, as forward P/E is still really attractive in those names, primarily driven by supply and demand. The AVGO print on Wednesday simply accelerated that which was in motion.

We’re seeing geopolitical news move into macro, with oil dropping, and expected to drop because of eased tensions (we’ll see about that one), it eases yield pressure. Which unlocks value and rate sensitive sectors.

When you have lower energy costs, this improves margins for industrials, transports and consumer names. Falling yields make dividend-paying financials and healthcare stocks more attractive.

When we have overcrowded trades, especially going into OPEX/quarter end, we’re going to see some profit taking, unwinding and pulling into names that have lagged, primarily value. Despite forward P/E in many chip names that are running rampant (check ) this is a temporary rotation before they become a focal point again as well as MAG7 which has been left behind (for the most part).

Rising indexes with declining stocks? Breadth

Indexes can rise even when most stocks decline, this is what’s happening when the heavyweight outperform. When many stocks rise together, naturally the trend is more sustainable. But in this situation we have slight divergence.

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They reported a record breaking quarter, similar to but the market didn’t like it. The “whisper number problem” strikes big tech earnings again, and not for the first time this earnings cycle.

AVGO ER

Record revenue, record free cash flow, AI chip growth of nearly 145% YoY. EBITDA margin expanded to ~70% above the 68% guided.

Total Q2 rev. $22.18B up 48% YoY. Q3 guidance of $29.4B which up ~200% YoY on AI semiconductor revenue alone. Just looking at the numbers, strong quarter.

AGVO printed a high of ~500 before slumping down to ~405 on the earnings announcement.

There were 3 layers to this sell off.

1. The whisper miss. EPS came in at $2.44, beating $2.39 consensus but missing the “whisper” number of $2.45 by 1 cent, yep, 1 cent. In a normal market, that is pretty irrelevant, but in a market where AVGO ran 45% over the last few months into the price, one cent below can be a trigger to exit longs.

2. Q3 Guide Didn't Blow Out. Q3 guided to $29.4B — a strong raise, but not the magnitude the most aggressive buyers had positioned for. Real guidance raise. Wrong size for the whisper.

3. Software Softness. AI semiconductor revenue $10.8B, +143% YoY, 49% of total revenue — flawless. The drag was a small shortfall in the infrastructure software segment. One light line item on a stock priced for perfection is all sellers needed.

The Long-Term Story Hasn’t Changed

FY2026 AI revenue reaffirmed at ~$56B (+180%). FY2027 AI revenue above $100B reiterated. Long-term Alphabet co-development agreement through 2031. 3.5 gigawatt AI compute deal with Anthropic starting 2027. Free cash flow crossed $10B in a single quarter for the first time. The custom silicon moat is deepening, not eroding.

A company printing $10B quarterly free cash flow guiding to $100B in AI revenue doesn’t have a business problem. It has a valuation and positioning problem — and those resolve over time.

The Bottom Line

AVGO printed one of the best quarters in semiconductor history and dropped 8–14% after hours. That’s not the market saying the AI thesis is broken. That’s the market saying the stock had already priced in perfection and got one cent short on EPS with a guide that was strong — just not strong enough for the most aggressive positioning. The fundamental thesis is intact. The trade that got punished was the one that chased the 45% run into the print.

The stock has come back to the low of the developing balance around 400, where a nice base can form and look for the continuation higher after this monster gap. I would give it some time to settle before jumping aboard.

Considering were seeing a sell off in the majority of names across the board, specifically tech, this could be the pullback we were waiting for, identifying the expected temporary top on around 760.

The Private Equity Liquidity Shock

The most under reported story of the session. Partners Group capped investor withdrawals from its $8.6B Global Value SICAV fund after redemption requests hit 9.8% of total value — nearly double the internal safety threshold, automatically triggering withdrawal limits.

The selloff spread immediately across the sector. Blackstone -4.46%, KKR -4.18%, Ares Management -4.3%, Blue Owl Capital -2.9%. Partners Group itself dropped 16% in Zurich — its worst single-day decline on record.

The CEO attributed the redemption surge to “jitters among wealthy clients toward private markets more broadly.” When HNW investors pull money from $8.6B evergreen funds at 9.8% quarterly redemption rates, that’s not idiosyncratic — that’s a sentiment signal across the entire alternative asset ecosystem. KKR and Blackstone are index components. Their 4-5% drops added direct S&P pressure on a day where tech was already under siege.

Big tech takes a tumble, MAG7 pulling off highs.

The rotation into tech has been led largely by select chips, DELL, MVRL and some others, but not really by the mega cap names. We’ve seen highs on and earlier but even the last 3 are slumping off highs now.

The declines come amid concerns about soaring AI capex and the ability to meet increasingly high earnings growth expectations. The cycle that's been bullish for infrastructure names is a headwind for the companies writing the cheques — Alphabet raised $80B in equity to fund AI spend, Microsoft's margins are under pressure from Azure buildout, and Meta is deploying tens of billions into infrastructure that hasn't yet shown commensurate revenue returns.

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Order flow is one of the most powerful tools available to a futures trader — used properly, it lets you identify large expected moves based on institutional activity in real time or the immediate past. But as I’ve written before, it’s riddled with noise. The challenge isn’t just reading the flow — it’s navigating the noise to find where the large players are truly active.

The concept, as it was taught to me, comes down to three things:

1. Large players

2. Reactions

3. Speed

It’s not what most people think. It’s not just size hitting the ask and you start buying. There’s a framework behind it.

What Constitutes Large Players — And How Do You Find Them?

I’ll be using S&P 500 E-mini (ES) and Nasdaq E-mini (NQ) futures throughout to illustrate. Each market has different volume characteristics and volatility — if you trade something other than ES or NQ, you’ll need to calibrate what constitutes large size in your specific market.

The market runs on a two-way auction — buyers at the ask, sellers at the bid, coming together to provide liquidity. Some of those participants throw in larger orders than average at specific levels. It may not be one player — it could be several — but when large size trades at one level, it creates an outlier visual on order flow charts.

The categories of large players you’d generally expect to get active:

1. Commercials / Hedgers

2. CTAs & Trend Following Funds

3. Prop Desks & Market Makers

4. Asset Managers & Institutions

In practice you’ll never know which category is active or what their intentions are. Multiple large participants can converge at the same level simultaneously — a CTA trigger, a market maker managing inventory, an institutional trader working a VWAP order, all at the same price. That convergence is what creates the high-volume nodes in the profile, the absorption sequences, and the reactions we use as signals. The footprint doesn’t tell you who’s there — it tells you that size is there. The reaction confirms the thesis.

Where Do You See These Players?

Several order flow tools exist — visual, numeric, DOM-based. The DOM is the original — all flow moves through it and you can see where imbalances exist in the book. For the visual component, I focus on two specific charts:

The Footprint and the Large Trade Indicator.

Before using either, you need to define what you’re looking for. Generally, 2–3x the volume on one side versus the opposite creates an outlier worth paying attention to. If 500 contracts trade at the ask and 150 at the bid — that’s over 3x. That’s an outlier.

The Footprint Chart

The footprint charts I run on ES and NQ are reversal bar charts — 16 ticks on ES, 24 points (aggregated) on NQ.

The footprint is a visual representation of bid vs. ask trades within each candle. Every candle shows the full bid/ask volume traded at each price level within that move, with delta displayed immediately to the right — representing the difference between ask and bid volume at each level.

Not every candle will show what we’re actually looking for. The outliers we want are:

• Large delta — ES: 250+ | NQ: 100+

• Imbalances — ES: 200+ | NQ: 80+

• Large Trade Bubbles

These are the starting points. When they appear at key structural levels — balance tops, balance lows, high-volume nodes from the profile — they stop being noise and start being signal.

Reading Delta on the Footprint

Looking at footprint outliers in isolation turns into noise quickly. The process starts with the volume profile — identify key structural extremes, low volume node drop-offs, and balance boundaries first. The footprint confirms what’s happening at those levels. Without the structural context, you’re chasing blips.

Large Player Delta — What It Means

Delta is the difference between trades at the ask minus trades at the bid. It represents directional imbalance at a specific price level.

• 500 at the ask, 200 at the bid = +300 delta (aggressive buyers)

• 200 at the ask, 500 at the bid = -300 delta (aggressive sellers)

These large imbalances create the outliers that tell you who’s expected to drive the move — but the delta alone isn’t the signal. The reaction and speed after the delta prints is everything.

If +300 delta appears and price holds — aggressive buyer confirmed. If +300 delta appears and price immediately sells through — they’re trapped. Same level, opposite outcome, completely different trade.

The Two Delta Scenarios at Support

Delta can appear in two forms at a key level. Here’s how to read each:

Large negative delta into support — aggressive sellers pressing into a key level. If price stalls and starts to move back above that area on repeated tests, those sellers are being absorbed by passive buyers. The aggressive sell side is losing the battle. That’s the setup.

Thresholds to watch: ES 250+ delta | NQ 100+ delta

Large positive delta at support — aggressive buyers stepping in directly. Easier to read, but the same rule applies — the reaction and hold on retests is what confirms the move is real.

Example — NQ Overnight Balance Low at 30,670

The overnight balance low sat at 30,670. Price moved into the area and the footprint showed 2–3 blocks of negative 130–150 delta printing directly at the level. Aggressive sellers pressing into known support.

Price immediately popped. On the retest, another press higher. Those aggressive sellers were being passively absorbed by buyers sitting at the level — the exact sequence that defines the setup. Add the large trade bubble stepping in simultaneously and you have full confluence: structural level, delta absorption, large trade confirmation, and price response. That’s not noise. That’s signal.

The sequence matters: structure first → delta outlier at the level → reaction and hold on retest → large trade bubble confirmation. Each layer filters out noise. All four together is the highest-probability entry the footprint framework produces.

When Delta Fails — The Trapped Player Setup

If price sells through a large delta level rather than holding it, the dynamic inverts completely. Those aggressive buyers are now trapped — and when the level gets retested from above, the expectation is for price to reject and expand lower. The sellers who were absorbed are now back in the driver’s seat.

This is why retests of broken delta levels are high-probability entries. The trapped buyers need to exit, the sellers are confirmed in control, and the path of least resistance is the next support below.

Example — NQ Break of 30,620

Support at 30,620 breaks. The footprint shows a cluster of large sell delta — multiple prints of 120+ delta with several additional 80+ blocks surrounding them. Together they represent heavy sell-side pressure concentrated at one level.

On the retest back into 30,620, buy delta forms into the high with a large trade bubble stepping in — an attempt by buyers to reclaim the level. It gets rejected immediately. Price rotates lower.

The sequence: break → cluster of large sell delta confirmed → retest with buy delta rejected → rotation lower. That rejection on the retest is the entry signal for the short side, targeting the buy-side liquidity left below at 30,550.

The Framework in Full

Two sides of the same coin:

The level doesn’t change — the reaction to it does. Large delta at a key structural level is the setup. The retest is the entry. The speed and conviction of the reaction after the retest is the confirmation. Without the retest, you’re front-running. Without the structural context from the profile, you’re trading noise.

Large Players — Buy/Sell Imbalances on the Footprint

Imbalances are based on the diagonal bid/ask relationship within the footprint. 3x the ask volume over the bid = buy imbalance. 3x the bid over the ask = sell imbalance. A large buy imbalance at a key level suggests an aggressive buyer — and on retests, the expectation is for that level to hold.

Size matters. Thresholds worth watching: ES 250+ (ideally 300+) | NQ 100+. Like delta, imbalances don’t operate in isolation — they add confluence to one another and to the structural levels identified in the profile.

Example — ES Buy Imbalances

Two imbalance clusters appear on the chart.

First cluster — upper level: Three stacked buy imbalances printing at 1,123 / 212 / 222. These are significant institutional-sized prints. But they fail — and that failure is the signal. When large buy imbalances get sold through, the trapped buyers become fuel for the move lower. Massive absorption flips to supply.

Second cluster — bottom of the move: A 245 ES buy imbalance appears alongside large negative delta. Price immediately wicks higher. As long as price holds above these imbalances on subsequent tests, the expectation is for a reversal — the passive buyers absorbing the sell pressure are in control.

The Key Rule

Large imbalances that hold = support confirmed, long bias on retests. Large imbalances that fail = trapped buyers, fuel for expansion lower.

The imbalance tells you where size traded. The reaction to the level on the retest tells you whether that size is winning or losing. Read the reaction, not just the print

Buy and sell imbalances can be used just as delta would be, looking for large players, waiting for the reaction, and then confirming if they’re strong or weak to play off.

Large Players — The Large Trade Indicator (Bubbles)

The Large Trade Indicator highlights unusually high volume from a single aggressive trader at a specific level — visualised as bubbles directly on your chart. It’s a cleaner alternative to staring at the DOM or Time & Sales waiting for size to appear. Most platforms have it built in.

Filter settings I use: ES 49+ | NQ 29+. Anything above those thresholds gets highlighted.

Bubbles work the same way as delta and imbalances — same logic, different visual. Two primary setups:

1. Bubble forms at a point of interest and holds — trade the reaction

2. Bubble forms on a break of an area — trade the pullback back into it

The Three Scenarios When Looking to Buy

1. Large blue bubble (buyer) steps in and price immediately pops — passive buyers absorbing sell pressure, or aggressive buyers initiating. Long on rotations back into the bubble level.

2. Large blue bubble creates a breakout of resistance — buy into those buyers on the pullback. They’ve defined the level, now you use it as support.

3. Large red bubble (seller) steps into support and gets rejected — aggressive sellers absorbed by passive buyers. If price moves back above the red bubble, lean on the idea those sellers are trapped. Long bias on retests.

The opposite logic applies for sell setups.

Example — NQ Bubbles in Sequence

Three distinct bubble signals at the same general level:

First: Large red sell bubble at 30,670 — price immediately pops above it. Aggressive seller absorbed. Passive buyers are in control. Look for longs on rotations back into the area.

Second: Large red sell bubble steps in — price immediately drops. Aggressive seller confirmed, not absorbed. Sell into rotations back to that level.

Third: Large blue buy bubble on the higher low — price immediately pops. Aggressive buyer confirmed. That’s the long entry.

Reading the Sequence

The bubble alone isn’t the trade — the immediate price reaction is the confirmation. Same red bubble, two completely different outcomes depending on whether it holds or fails. The market is telling you in real time which side is winning. Your job is to read the reaction and align with the dominant participant — not the bubble color.

Structure from the profile → bubble at the level → immediate reaction → entry. That’s the sequence.

The Trapped Seller + Aggressive Buyer Combo

One of the highest probability setups the framework produces — and one of the rarest. When it appears, it deserves full attention.

The sequence:

Step 1 — Large sell bubble prints at a level. Aggressive seller steps in. Price immediately pops above it — the seller is trapped, not absorbed in their favour.

Step 2 — Price rotates back into the sell bubble level. This is the retest. The trapped seller is now underwater and defending.

Step 3 — Large buy bubble prints directly into the trapped seller. An aggressive buyer loads size at the exact level where sellers are trapped. Two forces converging simultaneously: trapped sellers needing to cover, aggressive buyers initiating new longs.

Example — ES at 7,569

Large red sell bubble prints at 7,569. Price pops immediately — seller trapped. Price rotates back into the level. A large blue buy bubble steps in directly at the trapped sell side. Price flips higher aggressively.

The trapped seller provides the fuel. The aggressive buyer provides the catalyst. Together they create a self-reinforcing move — sellers covering their losing positions adds to the buy-side pressure the new buyer is already generating.

This is why the combination hits harder than any single signal. You’re not just trading one large player — you’re trading the collision of two opposing forces resolving in one direction simultaneously. When structure, trapped seller, and aggressive buyer all align at the same level, that’s the cleanest long setup the order flow framework produces.

Putting It All Together

Delta, imbalances, and bubbles don’t always appear simultaneously — waiting for all three to align on every trade will cause you to miss valid setups. Use them as a confirmation stack. One is a clue. Two is confluence. Three is conviction.

The framework always comes back to the same two questions:

How does price react to the large player? Is there speed to that reaction?

A large delta block, a stacked imbalance, or a significant bubble at a key structural level means nothing without a reaction. The reaction — and the speed of it — is what separates signal from noise. A slow grind back into a level after a large buy delta print is not the same as an immediate aggressive bid. Speed confirms intent.

Structure from the profile gives you the level. The footprint tools give you the evidence. The reaction and speed give you the trade.

Happy Trading.

DISCLAIMER: All content by Paralia Trading Desk and Victorio Stefanov is for educational and informational purposes only. Nothing published constitutes financial advice, investment advice, or a trading recommendation. Victorio Stefanov is not a registered financial advisor, CTA, or broker-dealer. Past performance and historical results do not guarantee future results. Futures trading involves substantial risk of loss and is not suitable for all individuals — you may lose more than your initial deposit. All trading decisions are solely your own responsibility. Trade only with capital you can afford to lose.

Paralia Trading Desk | Educational content only. Not financial advice.

Some warnings signs floated into the market but it refused to drop.

ISM manufacturing PMI hit 54.0, the highest reading since May 2022, up from 52.7 in April. New Orders index 56.8. Fifth consecutive month of expansion. Prices Paid still 82.1 — near multi-year highs. Iran war mentioned in 42% of respondent comments. One panelist: “Panic is starting within our industry.”

Strong manufacturing + elevated input costs + Iran risk = Fed’s worst-case scenario confirmed. Money markets moved to price a 68% chance of a Fed rate hike by end of 2026. Three months ago that probability was near zero.

Oil keeps spiking, with WTI up $4 or 5% in the last 2 days, as Iran ceasefire tensions flared. Paired with Exxon’s SVP warning of $150-$160 Brent within weeks, and inventories at record lows, every spikes carries different weight than it did six months ago. Energy is the only sector consistently green while tech rips, the market pricing two outcomes simultaneously. Which isn’t good for inflation expectations and possible hikes?

The current consensus is that there is a 68% chance of a hike into the end of year.

earnings print - Last Big Boy in Semis

Broadcom reports today after the close (June 3rd), which might be seen as the second most important AI semiconductor print of the quarter, behind , and is some scenarios, structurally more important.

AVGO has continued the bid, while NVDA lags, which makes it one our favorite names in this cycle, the long idea came in March on (leveraged AVGO ETF). It was a “semi” painful hold before rallying over 100% and earnings expectations are pretty sound for the continue rally after we’ve expanded out of the most recent balance.

Q2 guided to $22.0B revenue (+47% YoY).

AI semiconductor revenue $10.7B (+140% YoY), EBITDA margin ~68%.

Street models $2.39 EPS, buy side bar is higher, and the Q3 guide matters more than Q2.

NVDA sells merchant GPUs to everyone, while Broadcom designs custom silicon exclusively for & ByteDance. You can’t swap out a custom chip, the revenue is stickier, more predictable and harder to disrupt. AI networking (Tomahawk switches, 200G SerDes) represented 33% of AI revenue in Q1, expected to hit 40% in Q2 as hyperscalers build gigawatt-scale clusters. 7 consecutive beats and tonight might be number 8.

Investors will be watching VMware as well, revenue is up 13% YoY, ARR +19%, Q2 software guided to $7.2B. The integration is quietly compounding margins on top of explosive AI semi growth. Semi + software margins simultaneously is a model that NVDA hasn’t tapped into (yet at least).

The main things to look out for today during the earnings report, 3 figures:

• AI revenue vs $10.7B guidance

• Q3 AI guide

• VMware ARR

AVGO might be the real-time referendum on whether the hyperscaler capex cycle is accelerating or plateauing. Alphabet’s $80B raise, Dell’s $51B backlog and MRVL’s clean beat (not to mention Jensen saying it should be the next $1T company) all say accelerating, but we’ll see what AVGO does/says tonight.

Finally we’re getting value ( ) to join the party into ATH, however breadth is still sticky.

The current downswing in MAG7 names adds to breadth stickiness, since the largest players in the market don’t want to catch a bid, that could only mean one thing.

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The biggest headline that pushed markets higher yesterday was Trump’s announcement of no troops going to Beirut, and any troops that are on their way, have already been turned back. He then talked about continued trade talks with Iran, that we’re “at a rapid” pace.

It’s almost as if this back and forth is what is wanted in the market, and as long as there isn’t a “concrete” deal then the news of a “continued talks” is super bullish, creating waves of expansion. Seems unsustainable. This was after Trump said that oil prices would drop rapidly. (Yet to be seen).

Software is making headlines as it’s “SaaSpocalypse” thesis dies and the sector is in full rehab.

Our multi-month idea of (iShares software ETF) long after a turbo beat down is finally coming back to life. Up 37% since the pick out in February earlier this year, I just didn’t have the cahones to long all software like and to the gills.

It may have gotten a boost from up heavily post Trump investment and the ETF has had it’s best performance since October 2001.

The software re-rating had two drivers.

Huang addressed the AI disruption fear directly at Computex: “For software companies, this is a once-in-a-lifetime opportunity. With a vast number of AI agents emerging, the world will no longer be limited by human resources.” The godfather of AI infrastructure just told the market software isn’t dying — it’s the control layer for AI agents. Complete narrative inversion.

Simultaneously, the Jefferies Software, Internet and AI conference had enterprise executives confirming the same thesis. ServiceNow’s Amit Zavery said customers want centralized systems to monitor AI usage, costs, and operations alongside traditional software. AI isn’t replacing the platforms — it’s running through them. That’s a pricing power story, not a disruption story.

CRM added 8% — its strongest day in over a year — as investors re-engaged with the Agentforce thesis after the stock had been down 33% YTD. $27.5B in buybacks, 50% non-GAAP EPS growth, and the AI-as-amplifier narrative gave institutional buyers the cover to rebuild positions.

NVDA back to life…

If you’ve been keeping up with the newsletter & thoughts, was a name that we were looking at for a catch up play back to the upside, while all of it’s chip counter parts seem to be making daily highs, NVDA was left behind.

The hold of the balance low start around 210 was the target for the reversal, and we got a catalyst that helped drive that upside yesterday.

Jensen Huang took the stage at GTC Taipei / Computex and unveiled the N1X processor — built with Microsoft — powering the RTX Spark chip, launching this fall on Windows PCs from Microsoft, Dell, HP, ASUS, Lenovo, and MSI.

“Microsoft and Nvidia are going to reinvent the PC. This is the first completely re-engineered line of PCs in 40 years.” Huang called it the smartphone transition moment for personal computing.

Also unveiled: Vera Rubin AI computing platform, Vera CPU entering mass production, and new AI models Nemotron 3 Ultra and Alpamayo 2. 150 Taiwanese supply chain partners already in production. Taiwan’s stock market jumped 1,000+ points — TSMC, Foxconn, MediaTek, and Quanta all hit simultaneous all-time highs.

NVDA +6%. Dell +10%, HP +8% as direct beneficiaries. Intel -4% — the clearest signal of who loses in this architecture shift.

The strategic read: NVDA just opened a second TAM. Data center AI compute was the first. The 1.4 billion PC installed base is the second — with Arm-based chips taking direct share from Intel and AMD simultaneously. The N1X/RTX Spark isn’t a product launch. It’s NVDA planting a flag in every PC sold after fall 2026.

SPY Breakdown

We’re getting close to the tipping point I talked about this weekend. SPY 760-762, we’ll see what price does there, but going into uncertainty I would look for some risk off.

To preface this isn’t a point where I load the shorts or am looking for a top, but instead watching to see if we do top out to get our pullback.

The interest is long to ride the power trend around the 21MA, ideally. We’ll see if we get a move between the 21MA and the 8MA. Which would put us back to 750, but looking for 745 or so.

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During the Weekly Brief, I talked about some of the larger risks which include June OPEX, the Fed & geopolitical tensions, this is predominantly what I think creates uncertainty this month but I wanted to dive into what the path might look like a little more in-depth and where those true risks comes from vs the potential perceived “fake” risks.

But first, making headlines this weekend because Michael Burry put out research that their accounting was “fugazi” and the South Korean KOSPI paused trading today as it was up 5%. (Samsung up 11%).

Michael Burry vs (Accounting Case)

In May, 2026, Burry posted an article on his substack, that has amassed over 200,000 subscribers. The article was titled “ The Heretic’s Guide to AI’s Starts Part III: Tracepalooza and the Bezzle”. Where he broke down a specific argument yet against the AI infrastructure trade. It was significant enough that NVDA took the unusual step of sending a memo to sell-side analysts pushing back directly. Burry’s response “I stand by my analysis, I am not claiming NVDA is Enron. It is clearly Cisco”.

Burry’s 4 arguments:

1. Stock-based compensation understatement: Burry argues that NVDA’s actual stock-based comp dilution since 2018 was $112.5N not the $20.5B reported, potentially cutting earnings by 50%. NVDA called it a misinterpretation, Burry called the response a “straw man”.

2. Circular Revenue- The Fugazi Loop: Burry shared a chart titled “How NVDA and OpenAI fuel the AI money machine” where he broken down every company in the loop has “suspicious revenue recognition”. The structure: NVDA invests in OpenAI, OpenAI buys NVDA chips, NVDA books revenue which increases stock funds more than investments. The revenue isn’t coming from end-user demand, it’s recycled capital dressed up as organic growth. If you remember we talked a bit about this a few months back, where several companies were in the loop with OpenAI but NVDA seemingly the largest. Which points to concern.

3. Buyer concentration: The top 5 hyperscalers account for ~50% of NVDA’s data center revenue. If alone cuts chip spending by 20%, the revenue impact is ~4.2%. “NVDA is selling into a concentrated set of buyers whose demand is being distorted by a training and benchmarking phase that won’t last”.

4. Depreciation Understatement: Burry estimates depreciation understated by ~176B industry-wide from 2026-2028, with and profits potentially overstated by 20% later this decade.

Burry is betting on a “fugazi” NVDA balance sheet and even if this is only partially true that spells some bad times ahead for NVDA. I’m not saying I’m fully onboard, or fully against it, but Burry’s claims since the Great Financial Crash have been a bit too “bold”.

beat estimates by $3B, raised its dividend 25x, and authorized its largest buyback ever on May 20th — the stock still fell 1.5% in after-hours and another 4.3% the following week. When a company prints that and the tape fades, Burry's fragility thesis stops looking fringe.

We’ve been looking at the bull thesis of NVDA at Paralia, with the potential lag to catch up to semis counter parts and I think in the medium term this thesis is still valid, as the stock tries to climb pre-market.

KOSPI + Semis, The other side of the Story.

While Burry is short the tape, the tape is doing something very different.

The KOSPI hit a 5% circuit breaker to start the week, a 5-minute suspension of program trading. The Nikkei 225 broke above 66,000 for the first time and the Philadelphia Semiconductor Index surged 5.5% overnight. With KOSPI gains coming from Samsung’s 11% rally.

Across the board you have pre-market gaps higher in (who is set to report earnings this week).

MU — The $1 Trillion Moment. UBS tripled its price target on Micron from $535 to $1,625 — MU surged 19% on May 26th, crossing a $1 trillion market cap for the first time. SK Hynix followed the next day, jumping 9.3% to also cross $1 trillion — its 12-month gain now exceeds 1,000%. Samsung had already crossed $1 trillion earlier in May — meaning all three HBM producers now sit in the $1 trillion club simultaneously for the first time in history.

Fiscal Q2 revenue nearly tripled YoY to $23.86B. Q3 guided to ~$33.5B — exceeding the company's entire annual revenue from prior cycles. Entire 2026 HBM supply already committed. Wall Street forecasts 121% annual EPS growth over five years. PEG ratio: 0.07. Historically cheap for what it's become.

— June 3rd

Broadcom reports fiscal Q2 after the close June 3rd, up ~36% since its last print. AI custom ASICs for Google, Apple, and Meta is the bull thesis; VMware integration is the margin compounder. With MRVL clean and MU at $1 trillion, the bar is elevated. Watch custom silicon revenue, VMware progress, and forward ASIC guidance — those three move the stock.

The risks as we mentioned over the last week or so stem from the uncertainty that holds into June.

The Fed has a new Fed Chair, Kevin Warsh, who will be holding his first conference and rate decision later this month.

June OPEX has some pretty bullish skewed positioning and we’ve seen an extended move in price, which could trigger re-adjustments.

Geopolitical tensions are still present without anything concrete (yet again).

Let’s dive into this more and what this actually means:

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A boat load of news last week & tape bombs to turn on the turbo bid.

We’ll discuss economic events, geopolitical market drivers, earnings & stocks and what June could bring in the overall market and where the opportunity lies.

At the end of the article as always we’ll drop a breakdown of the futures plan to start the week.

First, with the end of month comes repositioning, CTA positioning entered the week a the 88th percentile of historical equity exposure. After buying $53B in global equities over the prior month, the team was super long. Into the lows, we had pinpointed the large divergence between the market and CTA positioning which eventually turned on the buy algos.

Goldman Sachs estimated $25B+ in US equity selling from pension rebalancing into the end of month, one of the 15 largest sell estimates on record since 2000. They also estimated that $14B of additional US equities were sold form pensions into Friday’s close. CTAs put some sell pressure on as well.

Instead of looking at this as turbo bearish and we’re starting to cap off the top, I see it as alignment with last weeks though of June weakness before the next leg higher. The pullback then rippy rippy. When stocks rally this aggressively, some start to overwhelm the overall position in larger portfolios which forces some profit taking to rebalance the book.

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Economic data

GDP Q1 Second Estimate

Q1 2026 GDP revised down to 1.6% annualized from 2.0% advanced estimate, missing the 2.1% consensus. The revision was almost entirely inventory-driven — core domestic demand held at a solid 2.4%.

The inflation component is the real problem: PCE price index +4.5%, core PCE +4.4% revised up 0.1pp. Imports surged 21.1% as businesses front-ran tariffs. Housing investment fell for the fifth consecutive quarter (-6.3% annualized). Corporate profits rose only $40.4B in Q1 vs. $246.9B in the prior two quarters combined.

Growth decelerating, inflation re-accelerating, consumer under pressure. Classic stagflationary setup.

PCE (April figure)

Headline PCE +3.8% YoY, hottest since May 2023. Core +3.3%, up from 3.2%. Income flat, disposable income -0.1% — yet consumers still spent +0.5%, drawing down savings to a 2.6% rate. Late-cycle warning. Energy post-Hormuz is the primary driver with import pass-through not yet fully in the data — June 25th May print could be worse.

The Fed - Jefferson & what to expect in June

The 30-year yield hit 5.18% on May 20th — its highest since 2007 — before pulling back to ~4.97% this week. The cooling in yields has softened near-term hawkish expectations heading into Warsh's first FOMC meeting on June 16–17.

Into the close of the week, the odds of rate cut in June appeared again, although less than 1%, they were completely off the table earlier in the week, meaning the odds for a rate hike into the end of the year have fallen. (based on Fed Watch Futures from the CME website, image below).

Vice Fed Chair Jefferson some directly into the Asia open on Wednesday, citing inflation risks skewed upside, June FOMC undecided, US vulnerable to oil shocks. Which pushed equities down, yields up and the dollar up. Easing cycle expected 2027 at the earliest.

Maybe most importantly, this June 16-17 is Warsh’s first Fed meeting. Rates are expected to remain unchanged, 3.50-3.75%. Inflation is at 3-year highs, mortgage rates at 9-month highs. The language that Warsh uses is going to give us a real look into what he’s all about during the cycle and how the market perceives his tone.

Current data make it pretty much impossible to justify a cut, but a hike is on the table this year. Not what Trump wants to hear. Powell didn't leave — his governor term runs to 2028, keeping him at the table as a voting member. April's meeting already produced four dissents — the most divided committee since 1992. Warsh is chairing a fractured committee in a stagflationary regime with no clean policy answer.

If June delivers a hawkish statement and a higher dot plot, the yield relief reverses fast. Tech, semis, and AI infrastructure — the entire March-to-ATH rally — are long-duration assets that reprice mechanically with every 10bps move in the 10-year. The Nasdaq has traded inversely with yields nearly tick for tick since February.

The most dangerous scenario: Warsh leans dovish in his press conference while the dot plot stays hawkish. That chair vs. committee disconnect is exactly what bond vigilantes wait for. If Fed independence comes into question, the long end sells off regardless of what Warsh says — and sustaining ATH equity valuations with oil at $87 and core PCE at 3.3% becomes very difficult.

Geopolitical DEALS?

The tape bombs were real this week, completely shifting the structure on Thursday in markets. We had a slow reversal shaping up and grind lower mid week after ATH failed, but news that a deal was confirmed this time changed it all. Not easy to trade when news comes out of nowhere. The dominant narrative of the week. US and Iran reached a tentative agreement on a 60-day MOU to extend the ceasefire, reopen the Strait of Hormuz, and begin nuclear talks — but Trump hadn’t signed off and Iranian officials hadn’t publicly confirmed a thing.

The intraday feed told the full story. Axios breaks the deal at 17:15. By 17:49, i24 reports Khamenei has not accepted the MOU. By 21:19–21:22, Iran’s Tasnim agency issues three consecutive denials — MOU text unfinalized, Western reports “not true,” Pakistani mediator not notified. On the same day, Iran fired a ballistic missile toward Kuwait — intercepted by CENTCOM — while the US simultaneously dropped new sanctions on eight ships involved in Iranian petroleum exports.

Negotiators have a draft. Leaders don’t have a deal. Iran is negotiating and escalating at the same time — classic leverage play before the ink dries.

The binary is simple: Trump signs and Hormuz reopens — oil drops hard, headline inflation cools into Q3, the Fed gets the cover it needs to signal cuts. Deal falls apart — stagflationary regime stays fully intact and the macro ceiling on this rally holds.

Earnings & Stocks

What we learned about swing trading/investing this week: wait for Trump to announce which stock he’s already long.

Just like last year, these last 2-weeks brought life to (which had earnings on Thursday) and .

Trump told everyone to go out and buy Dell, not too long after a deal with the Pentagon is announced, and they post killer earnings, up 80% since he called it out.

He also told up about a $1B investment in IBM last week since that post, IBM is up ~30%.

These 2 plays, DELL & IBM were discussed with the group at Paralia and they’ve done exceedingly well.

Since we’ve started Paralia, the swing trades have been doing numbers. (outside of what Trump dished out on a plate).

up 70%, up 105% , up 60%.

Adds on up 18%, up 16%, up 9.5% and up 35%.

The only current laggard is but we had a pretty solid thesis on the name, which I’ll discuss in the weekly video, along with the other plays we’re interested in.

I do like the long thesis for continued long semis/memory. With wide eyes on and it’s movement. With that is currently lagging, but I see this more as a post ER pullback before we level out and continue the trend into the end of the summer.

My eyes are on semis, I think that everyone’s too busy trying to call the top on the overextended asset, but the demand and revenue in a these companies speaks for itself. It’s a semi based market that has the potential to run into 810+.

I want to look for adds in semis, specifically SMH through leverage as SMH pulls back to 560-580 area for the next leg higher. The June weakness should present that opportunity. Along with big names around semis & memory. (Will discuss this more in the weekly video)

SPY Full Breakdown

The next leg of this bull is shaping up, we nearly tag my weekly target at 760, ES futures run to 7610 before rolling over, and we’re entering the expected window of weakness. The first 2 or even 3 weeks of June might be a bit choppier in markets with a slight pullback to create balance into the highs as we’re getting repositioning towards the end of the quarter. After such a block buster quarter, money is starting to fly out of monster winners and into potential monster winners (wink, wink, software).

Which means I would really like to see the pullback start towards the 21MA on SPY, but this week has a pretty good potential to hold balance.

In a perfect world we top out somewhere around 762 area before pulling back mid June into the the 745 area, +/- 2 points before we launch the continued move higher.

It’s a little rare to not have seen the 21MA yet to hold the continuation, the 50MA is about to catch up for the power trend move.

Currently, there is mini balance with a top somewhere around 751 that would do well to hold out this week on pullbacks. Otherwise the move back under would most likely present the pullback we’re looking for around 745.

There is a micro balance starting to develop into the ATH between 754 and 758, I think the upper band shifts to around 762.

The buyers aggressive goal is to hold 754 this week to start things off, otherwise around 751 should go bid, possibly develop a larger balance between 751 and 762.

The power trend is still expected to run into the end of summer, possibly mid-September when we start to see the weaker seasonality hit markets. (more in the weekly video, posted Sunday).

Futures going into the first week of June

ES Futures

Taking a look at the weekly profile first, we have an expansion week after heavier balance into the prior ATH was created, between 7360 and 7455.

There is a new, smaller balance that was developed this week, between 7520 and 7555, since prices closed above, this is the target balance for the ATH to hold. Even if we start to see a slip up this week, we would want to hold this balance area for the continued move higher.

The higher low balance could be between 7520 and 7575 even this week. The highest balance is between 7575 to 7610 on the week.

The two main points of interest for the buyer to hold out in the coming week or to start are 7575 and 7555.

On the session profile, we have a main initial area between 7582 and 7575 to find buyers to kick off the aggressive bid on the week.

There is low volume under 7575 from Thursday’s news pop of a peace deal being reached. Under 7575 we should trigger the sell to target 7555-7545 wide area for the buy side to step back in on the week.

I would look at the 7545 area as the desperate fade reversal long this week to keep the buy side trend in tact.

Punts long on the reversal from 7555 make sense as well, where we could go clean that low volume under 7575 to start things off on the week, granted we don’t have a monster gap lower on Sunday night’s open due to news. (Not sure as I write this article).

NQ Futures

The weekly profile on NQ presents a double distribution, the top 30,260 to 30,450 and the bottom 29,900 to 30,080.

Meaning we have 2 major areas to hold larger higher lows on the week. The best case is that we trigger most long side from 30,260 but that would be a really bullish case, there is a good chance we can clean some volume up under 260 towards 170 and 080, where buyers would want to position themselves.

Overall this week as long as we hold even between 30,000 and 30,080 on the lower end we would look for a new higher low balance creation for the next leg higher.

DISCLAIMER: All content by Paralia Trading Desk and Victorio Stefanov is for educational and informational purposes only. Nothing published constitutes financial advice, investment advice, or a trading recommendation. Victorio Stefanov is not a registered financial advisor, CTA, or broker-dealer. Past performance and historical results do not guarantee future results. Futures trading involves substantial risk of loss and is not suitable for all individuals — you may lose more than your initial deposit. All trading decisions are solely your own responsibility. Trade only with capital you can afford to lose.

Paralia Trading Desk | Educational content only. Not financial advice.

Yesterday, pre-market, the Fed’a favorite inflation gauge came out, PCE. +0.4% MoM (hottest print since May 2023), +3.8% YoY, up from 3.2% in March, could this be a late cycle warning with consumers drawing down savings to fund consumption.

The energy figures were the headline driver, core PCE was just below 0.3% before rounding and the YoY figure at 3.2% (hottest since Nov 2023). Gas posted its fastest 2-month rise on record, after Hormuz.

The Fed can’t cut on a 3.2% core and 3.8% headline, consumer spending is still there while incomes are flat, cutting here reignites another inflationary cycle.

It seems like we can’t hike (yet). Savings rate at 2.6%, real PCE only +0.1%, income stagnating. The Fed already flagged inflation as “elevated” in May, pointing specifically to global energy prices. Hiking into a weakening consumer risks a hard landing.

Based on the CME Fed Watch Futures data (below), we have a 100% chance that rates stay on hold in the June meeting and by December, 2026 there is about a 48% chance that we have 1 hike. This number was nonexistent a month or two ago where cutting was still on the table. Meaning no cuts are expected this year, and with the new Fed chair, Kevin Warsh, the hikes make a lot more sense. Given his historic hawkishness.

Do we have a deal?

Has the deal been reached? Are we closer? It just seems like the classic back and forth. It caused markets to rip yesterday, pressing into ATH and holding the bid.

Here is the news from Financial Juice yesterday, chronologically.

By the end of the evening, the “deal” had been almost entirely walked back by both sides. What exists is a negotiator-level draft framework that neither Trump nor Khamenei has approved. Iran’s Tasnim denials — coming from a source close to the negotiating team — suggest internal Iranian politics are not aligned. Khamenei signing off on an MOU that essentially pauses Iran’s nuclear leverage in exchange for a 60-day window is a hard domestic sell in Tehran.

The market had already priced a partial “deal probability” into oil and equities during the session. The Tasnim denials mean that premium evaporates overnight — oil finds support again, the deflationary catalyst everyone was hoping for doesn’t materialize, and the stagflationary overhang remains the dominant regime heading into the weekend.

Bottom line: Negotiators have a draft. Leaders don’t have a deal. Until Trump signs and Khamenei publicly endorses — not denies — the MOU, this is noise dressed up as signal.

Another hit pick by the President -

On May 8th, Trump pretty much told everyone to go out and buy Dell, as he recently did with

So, we took a look, and did just that as we had discussed with the team 2-weeks ago. Dell went from about 235 up to 441 yesterday in the after hours on earnings, that is a 90% gain since the announcement and 40% on earnings alone. IBM since the announcement is up around 17% and seems like just the start.

Let’s take a look at the timeline.

Dec 2025: Dell family pledges $6.25B to Trump accounts.

Q1 2026: Ethics filings confirms that Trump bought $1M-$5M in DELL stock before any public endoresement.

May 8, 2026: Trump tells a White House crowd to go out and buy a Dell, stock rallies 14% intraday, hitting ATH.

May 27, 2026: Pentagon awards Dell a $9.7B software contract covering Microsoft 365 and cloud licensing for the entire US military.

May 28, 2026: Earnings drop, stock rallies 40%.

Revenue $43.8B (+88% YoY) vs. $35.5B expected. EPS $4.86 (+214%) vs. $3.00 expected. AI server revenue $16.1B (+757% YoY). $24.4B AI orders booked. Backlog now $51.3B.

Full-year revenue raised to $165–$169B vs. prior guide of $138–$142B. Q2 guided to $44–$45B vs. $35.1B expected. AI server revenue raised to $60B for the year. Stock surged 38% after hours — now up 152% YTD.

Dell beat its entire original full-year revenue guide in a single quarter. The guidance wasn’t conservative — it was structurally wrong.

When has the President ever told the public to buy stocks with such accuracy as the current. The April 2025 low “great time to buy stocks” and now, the president is on fire.

Moral of the story, just buy stocks the gov tells you to buy! Ahaha, NFA!

SPY Full Breakdown:

Fresh highs as we’re hitting our weekly targets of 755-760, Friday buy day? Can we continue the leg? The current momentum is lining up for another attempted trend move on the overnight as we’re wrapping up the month of May.

The next leg of these longs is picking up, but I don’t think it comes without volatility as we enter June and look forth to the Fed & OPEX.

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There was no panic yesterday, large size stepping in, getting passively bought back up until the inevitable break. So… time to look for the reversal higher into the end of the week. Or at least let’s see how PCE data comes in this morning.

Semis have run like crazy over the last two days and some participants are furious at for pumping so hard they decided to short it, while there are massive calls coming in for over $1,200. is the weaker market that seemingly has had its earnings report turned bearish and hit the $210 area yesterday. (pullbacks welcomed).

Some relevant earnings & news after close yesterday:

DELL — Politics, Pentagon & AI

The most politically charged print of the cycle. Michael Dell pledged $6.25B to Trump Accounts in December. Trump returned the favour at a White House Mother’s Day event — “go out and buy a Dell” sent shares to an all-time high of $263.99, up 14.6% intraday, capping a 139% YTD run. Ethics filings confirmed Trump held a $1M–$5M DELL position bought before the endorsement. The day before Q1 earnings, the Pentagon awarded Dell a $9.7B software contract covering Microsoft 365 and cloud licensing for the entire U.S. military. The fundamentals justify the attention: $64B in FY2026 AI orders, $43B server backlog, guiding to $50B in AI revenue for FY2027 — ~100% YoY growth. At 139% YTD, anything short of a meaningful guidance raise gets sold.

CRM — Beat the Number, Missed the Vibe

EPS $3.88 crushed the $3.12 estimate. Revenue $11.13B ahead of projections. A 25% EPS beat. Stock still declined on cautious full-year guidance. CRM entered earnings down 33% in 2026 while the S&P was up 10% — it needed a blowout raise to re-rate, not just a beat. The Agentforce AI platform is the bull thesis, but conservative guidance signals Salesforce is still navigating AI disruption, not capitalising on it.

SNOW — Best Quarter in History. Stock Dipped.

Product revenue $1.33B (+34% YoY), strongest sequential dollar growth ever. RPO $9.21B (+38%). NRR 126%. EPS $0.39 beat $0.32 by 22%. Full-year guidance raised. Growth accelerated from 30% to 34%. $6B AWS deal and expanded OpenAI partnership add structural weight. Stock still dipped 1.32% AH — SNOW had already rallied 27% into earnings with markets pricing a 94.5% beat probability. Q2 guidance of 30% implies deceleration and fast money exited. Watch Snowflake Summit June 1st for the re-rate catalyst.

Fed’s Jefferson slumps markets overnight:

The main catalyst on the overnight seems to be Fed Vice Chair Jefferson’s speech. Right into the Asia open, which is the thinnest liquidity window of the session and when the KOSPI and NIKKEI fell off a cliff, Jefferson squeezed in some “stagflation” talk in brilliant Fed speak.

Yields went up, the dollar popped and equity futures down.

Inflation risks, skewed to the upside! WTI above $90, hovering around $100 for weeks now was brought to attention by Jefferson as a major inflation threat. Coming off the hot April CPI print that already rattled the market on May 12th, this was a pretty hawkish rhetoric.

The emphasis that the June rate decision has not yet been made, which might sound neutral, but it’s a touch worrisome. Markets were pricing in a hold with a dovish lean, now Jefferson can’t outright say what the decision is, and there has to be some ambiguity, but if they’re still thinking about it. We could have a higher probability of a hike on the table.

“Labour market steady, activity robust” is that a reason not to cut? Is this a strong economy? Together the labour market and robust activity in the economy have upside inflationary risks, they remove the growth-scare escape hatch bulls were hoping would force a dovish Fed pivot.

The soft counterbalances — “inflation easing later this year,” “well positioned to react,” “committed to 2%” — are standard Fed communication toolkit. Don’t be fooled. “Later this year” pushes relief out. “Well positioned to react” means they’re not cutting preemptively. “Committed to 2%” with oil at $100 is a veiled hike warning.

This was a prepared speech — not off-the-cuff. Deliberate Fed communication into thin liquidity, on top of an already fragile tape. Jefferson gave sellers the macro cover they needed.

All in all, helped crater markets on the overnight into the Asia session, I still look at this as an opportunity for the buy side to step back into the session and get back within balance, if not upside another boring balance.

SPY Full Breakdown:

Yesterday, markets stayed fairly calm, some movement to the downside but overall balance was held.

The potential that we look for the 8MA shallow pullback (744) is building out especially since we’re going into the month end and getting into the final month of the quarter (June).

This week is almost over and I would still look at the 755-757 area target, this downside move on the overnight is more of a reset to pull in another potential balance or trigger the next leg higher, let’s discuss.

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The week has kicked off well with Nasdaq well over 30,000 (get the hats ready) and our favorite “bubble” stocks ripping into new highs. While there is some lag in tech, semis are NOT feeling the burn.

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We’ll go over the next steps in the overall market move and anticipation for semis today, but first, let’s go over any news that might have shaped things up yesterday.

Yesterday, hit 752, into 731, into 508 and up to 290. All of these are gapping higher pre-market.

We didn’t see too much on the economic data front, with consumer confidence slipping 0.7 points to 93.1 in May. A slight beat of the Reuters forecast of 92.0. April was revised higher to 93.8 from 92.8.

Tomorrow (Thursday, May 28) we have a very important data point out of the US. PCE Deflator pre-market. This is the Fed’s preferred inflation gauge and the last major inflation print before the June 16-17 FOMC meeting. March came in at 3.5% headline and 3.2% core YoY. Economists now expect the April PCE to print 4.5% headline and 3.4% core. Sharply higher than prior estimates due to ongoing turmoil in the Middle East. If that prints anywhere near 4.5%, a June hike becomes a high probability.

Investors disregarded some of the climbing worries in the middle east yesterday as US forces fired “defensive strikes” at Iranian boats on Monday. Iran’s Foreign Ministry called it a ceasefire violation. The market shrugged it off and continued.

Qatar-mediated talks are still on the go, with a Qatari diplomatic team flying into Tehran coordinating with the US. With that oil prices continue to fall back towards the $8X.XX level.

Let’s head over to South Korea again, one of my favorite topics as we break through 8,000 on the KOSPI into new highs, led by a massive pop in Samsung. Apparently tens of thousands of employees are set for a $400,000 bonus from chip profit sharing and non-chip employees $4,000 in bonuses according to the Financial Times. The deal is almost done and the market is loving it, more fuel for the upside.

The KOSPI has risen nearly 100% YTD after rising 76% last year, becoming the worlds BEST performing index. Thanks to SK Hynix which is up 245% and Samsung up 165% this year alone, accounting for nearly 50% of the index.

The concentration risk is real and worth flagging. Samsung Electronics and SK Hynix together made up a record 42.2% of the KOSPI in May. Samsung’s market cap pushed past $1 trillion last week. Memory chip companies alone now represent roughly half of the KOSPI weighting and have contributed approximately 70% of the index’s gains in 2026.

Nomura is estimating SK Hynix to hit 4 million won and Samsung Electronics to reach 590,000 won over the next 12 months — implying a 20% advance in Samsung and a doubling in SK Hynix from current prices. However, Standard Chartered’s global CIO has already been advising clients to take profits on Korean equities and rotate into globally diversified portfolios, warning peak optimism “is not too far around the corner.”

Micron - The driver in memory explosion

Our baby has taken the reigns to start the week, back in the drivers seat and our leveraged position is up 90%. UBS tripled its price target on Micron from $535 to $1,625. Citing long-term agreement opportunities with partially fixed pricing.

"We believe the market will start to put a more 'normal' multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex." CNBC

is moving towards that $1T valuation as it rallied 15% yesterday. Trump praised the company at a rally on Friday for its “hundreds of billions” of investment in the US economy. Micron is trading at a forward PE ~8x which is really undervalued, and UBS thinks that that isn’t a reason as to why it can’t trade like at a forward PE of 24x. Meaning 3x rise in price target justified?

There are going to be more opportunities in semis and chips like rather than fomo buying into the highs.

SPY Full Breakdown - The next LEG

has done exceeding well to push into new highs, after that slight little pullback sellers couldn’t even get prices into the 21MA before expanding out of the balance above the 742 region.

This next bull leg has started and we’re still not safe from the 21MA pullback to continue the power trend higher.

In the weekly newsletter I upped my price target (personal opinion) to 810+ into September. Might seem like a lot but 60-points is ~8% from where we’re at. The main concerns come into the first 2 weeks of June…

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ES Futures Plan

We’ve seen ATH on the Sunday reopen. Some clean up of balance on the overnight today as we get into the prior highs ~7530. The goal for the buy side is simple today:

1. Bid from 7533-35 area to break above 7553

2. Bid above 7553 should start to trigger a trend day to the upside.

There is a point of desperation from the buy side around the 7515 to hold out, I would rather not see prices back into the spot. I would like to see the pop above 55 in the AM to hold 48-52 bid. The case for the seller is failed bids above 7553. Possible rebalance back under 7535.

NQ Futures Plan

Just a mere 5-points away from 30,000 and sellers say not today.

The overnight cleans a lot of the low volume left from the Sunday re-open, and today we’re looking for the potential continuation towards 30,000. That makes sense should the following take place:

1. We can hold bid above 29,900-920 to move into the overnight low volume.

2. Higher lows desperately try to bid ~29,820

There is a chance we start to see some of the buy side from the 29,730 (would be a big pullback and a session fade where we would get desperate for the buy side).

I would look at the 29,900-920 as the major point of interest because failures there suggest lower highs and potential of a turning point lower, especially under 820.

DISCLAIMER: All content by Paralia Trading Desk and Victorio Stefanov is for educational and informational purposes only. Nothing published constitutes financial advice, investment advice, or a trading recommendation. Victorio Stefanov is not a registered financial advisor, CTA, or broker-dealer. Past performance and historical results do not guarantee future results. Futures trading involves substantial risk of loss and is not suitable for all individuals — you may lose more than your initial deposit. All trading decisions are solely your own responsibility. Trade only with capital you can afford to lose.

Paralia Trading Desk | Educational content only. Not financial advice.

That’s what I’ll talk about today, along with several other topics, like inflation, rates, stocks, overall markets, positions we’re interested & futures (most likely more).

I’ll even go as far as to say, SPX 8,000…

If you’ve been keeping up with the posts, you know that we’re bullish and this last dip was bought, the target on SPX was closer to 7,700 going in September, but have since raised it based on data we’re seeing.

First let’s talk macro, I know, is it even worth it?

Inflation data is on top of the list, April CPI prints 3.8% YoY, the highest reading since May 2023, with a monthly gain of 0.6%. Core holds at 2.8%, well above the Fed’s target. The real kicker is that forecasts are coming out for a headline figure around 6% for Q2, a number the same panel had at 2.7% just 3-months ago. That revision should spark concern about how things truly are with this Iran shock that effectively destroyed the disinflationary thesis.

Energy is driving it — up 17.9% year-over-year, gasoline +28.4%, fuel oil +54.3%. These are not transitory. They take quarters to wash out, especially with Hormuz still unresolved. Real wages are down 0.3% annually. The consumer is being squeezed from both ends.

Kevin Warsh inherits the chairmanship at the worst possible moment. His framework — dovish on rates, hawkish on the balance sheet — was built for a benign 2025 that no longer exists. The White House pressure to cut was always the subtext of his appointment. That pressure now collides with a data set that makes cuts before late 2027 effectively impossible. Markets are pricing roughly a 40% probability of a December rate hike. The Fed has gone from “when do we cut” to “do we eventually hike again” in two months.

Crude Oil, Iran & the Deal?

WTI entered the conflict in late February around $65-72. By April 7 it had spiked above $115 — a 55-60% move in five weeks — as Trump’s ultimatum deadline approached. The April 8 ceasefire produced an immediate 16% collapse back to ~$94, but even after that unwind, crude was still 30% above pre-conflict levels. The truce was conditional and fragile.

Weeks of stalled diplomacy followed. As of May 24, Brent fell to $98 and WTI approached $92 on fresh deal optimism, but Trump confirmed nothing is finalized and the blockade stays until completion. Markets are pricing roughly 60-70% probability of a deal — crude is in announcement-gap territory.

A clean Hormuz reopening likely sends WTI back toward $75-80 and removes the most acute inflation driver. I think this area before a major base, around the heavier balance low to sustain a new normal WTI price. A breakdown sends it straight back above $105-110 and prices out any remaining rate-cut optionality for years. The inflation channel from oil matters more than the equity risk-premium channel right now. If oil normalizes, CPI could retrace toward 2.8-3.2% by Q4, restoring at least the optionality of a late-2026 cut. If it doesn’t, Warsh is left contemplating hikes into a slowing economy — that’s stagflation territory.

Something that may surprise you is that despite the potential reopening of Hormuz (even though there is an expected lag), I would still look for some energy positions like . (More on this below).

(Above the US10Y & US30Y)

The 30-year Treasury hit 5.2% last week — the highest since 2007 — before easing to 5.10%. The 10-year sits at 4.56-4.62%, moving on every Iran headline. The curve has steepened 50-55bps (30s minus 10s), driven by term premium expansion, not growth optimism. That’s a meaningful distinction.

Equities have been resilient — the Dow is at records, the S&P near highs — but the conditions underneath are strained. Private credit defaults are hitting records. Mortgage rates are back above 7.5%. Auto loan rates above 9%. Credit cards at 22-24%. The consumer is running on fumes, and this will show up in Q2-Q3 GDP in a way that creates the worst of both worlds — inflation still elevated, growth rolling over.

There is a good chance that rates have hit a ceiling and are starting to roll over, but with the potential of rate hikes on the table, we could see some fairly elevated rates for a while, which is going to really hard the consumer as well as equities.

Let’s talk US equities & positions.

SPY/SPX Full Breakdown

The upside continues, we’ve seen SPY bid up into fresh highs (well not until the market opens tomorrow) after failing to pullback to the 21MA. Which I still think is an option going into the 10th or 11th week up of this upside, we might get close to 760-770 before that triggers.

There is an expected catalyst in the coming weeks that is going to trigger that and then pick things up for the moon again.

That catalyst is the priced in lag of reopening the Strait of Hormuz.

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