Overview of U.S. Stock Market Futures and Forecast for the Week of 08-12/12

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The past week was rather boring both in the markets and in terms of market-related news.

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The news that impressed me most was the announcement of binary auctions by the largest exchange conglomerate, CME Group. On this firm's venues, futures set prices for oil, gold, wheat, etc.: the quotes are a benchmark for the entire world. And now comes the announcement of dollar options.

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Trump is preparing to officially announce the name of the next Fed chair in early 2026. He has already publicly nominated Hassett for this post more than once, but public does not mean official.

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Musk has been sued: allegedly, he took part in manipulating Twitter quotes before buying the service. He denies it. The proceedings continue.

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Zuckerberg seems to have had enough of playing with metaverses: Meta, banned in Russia, will cut spending on this project by 30%. The freed-up funds will be directed toward AI development. I wonder whether Zuckerberg will ultimately face a loss there too?

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AI startup Anthropic is preparing for an IPO. Marketers value the company at $300 billion. The main thing is to make it before the AI bubble collapses.

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The VIX volatility index futures contract, which a couple of weeks ago reached the psychologically important mark of 28 points, fell almost to its minimum values in 2025, around 15.5 points. Peace and quiet: the stock market can be carefully pulled farther north.

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The market has no doubt that the Fed will cut the policy rate by 0.25%. And how can anyone doubt anything else if the likely future Fed chief Hassett openly says that he expects a cut. Trump's appointee at the Fed, Miran, is taking a hard line and demanding an immediate 0.5% cut.

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Other Fed representatives generally speak in a similar spirit. Hammack stands apart, stating that restrictive monetary policy, i.e. keeping the rate unchanged, is preferable because of high and worsening inflation.

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The Kobeissi Letter, a newsletter popular among small investors, writes that the three-year bullish impulse is incredibly powerful. At the same time, during the week they also pointed to the high reality of a global debt crisis and reminded investors of the 14th consecutive loss-making quarter for investment securities at U.S. banks. The stated amount is $337.1 billion, which is 6 times more than in 2008.

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In the previous review, the 6870-6910 range was identified as the key one: if the price consolidates above it, one can confidently speak of continued northward momentum.

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In the outgoing week, there was no consolidation above the 6870-6910 range. Buyers were so confident in their strength that they did not let the futures quote fall below the 6797-6817 range. Let me remind you that earlier this zone was a price high, then liquidity for shorts was accumulated in it very quickly.

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The past week effectively turned out to be a week of balance: the first 4 sessions were generally in the 6820-6870 range, with an exit on Friday to 6910.

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The optimal scenario for ES futures buyers will be working in the 6880-6910 range on Monday-Wednesday. However, liquidity accumulation slightly below 6880, but above 6850, also does not cancel the upside expectations.

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Sales can be considered only if price consolidates below the 6797-6817 range, and even better below 6755-6768. But these are too alternative scenarios, and it is too early to think about them for now.

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If we look only at the week and only at RTH, the levels can be sketched out more carefully:

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A week of balance with upside expansion. Monday-Tuesday - volume building. Wednesday - a slight expansion with a transition into balance and liquidity accumulation on Thursday in the same zone. Friday opens with a small gap, which was traded through.

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They may take out buyers' stops at 6827.5-6842.5. But it should be precisely a spike with a sharp reversal to the upside. The idea that buyers' volume building should occur no lower than 6850 is also confirmed on the hourly chart.

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On the NQ futures, the overall picture is identical to the picture for the previous instrument. Except that on Monday-Tuesday we saw a decent upside expansion from the 25190-25280 support.

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On Friday, price confidently jumped above the zone of the latest shorts in the 25520-25670 range. Liquidity was built in this zone on Tuesday and Wednesday. On Friday, price touched the lower boundary of the short imbalance range at 25870-26060.

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Expectations for next week are generally identical: accumulation of longs from Monday through Wednesday in the 25600-25850 area.

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A short alternative is possible if price consolidates below 25100. But for now there is no point looking in that direction. If they show a move there, we will think about how to take that direction.

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Dow Jones Index futures have come very close to the short range of 48230-48450. Let me remind you that this is the only futures contract that made a new all-time high in the first half of November: other securities could not overcome the liquidity placed in anticipation of the Fed meeting.

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On Monday-Tuesday, buyers actively worked in the 47400-47600 range in order to move into a decent impulse on Wednesday. Thursday and Friday were marked by liquidity accumulation: work was carried out in the 47900-4808 range.

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A slightly deeper correction is possible on this future than on the previous instruments. This is connected with the volume accumulation model. Here, work is called for at the start of the coming week in the 47650-47900 range.

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I will not describe targets for possible shorts.

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But on the delta-range chart I will show an interesting point. The chart is built by accumulated delta of 500 contracts. The more volume accumulates before reaching a delta imbalance of only 500 contracts, the stronger the liquidity build-up is: they collect both with limits and markets.

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In the 47330-47630 range they worked aggressively in this regard. And similarly we will highlight the 47900-48100 area. Here I mark the levels roughly. What matters is the very fact that players are determined. Such patterns do not often form on this type of chart. It looks very much like preparation for strong dynamics.

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Overall, it can be said that it is reasonable to expect two scenarios: one probable, and the second alternative.

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The first (priority) scenario implies continued liquidity accumulation until the Fed meeting at the levels reached, with a possible slight expansion of quotes to the north. As a result of a positive Fed decision, we will see some growth with a renewal of all-time highs.

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The second (unlikely) scenario implies a repeat of the story from a month and a half ago, when, while awaiting the Fed meeting, quotes were pulled up to the very highs (buy the rumor) and then dumped after the fact (sell the fact). At the same time, there is nowhere much to fall - they may pick it up at every level.

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Right now quotes are exactly where they were at the previous Fed meeting. It will be interesting.

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I will separately remind you that on all instruments very large volumes went through at last month's lows. There is no comparable liquidity anywhere above: that is exactly why an upward move looks much more likely.

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And a small piece of advice: watch the growth of intraday volatility on Tuesday and Wednesday - they may sharply load liquidity on the swings.

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