Hello traders,
As I’m writing this, very early in the morning, S&P 500 E-mini futures are holding steady near 6,484, just below all-time highs, as traders wait for the 8:30 AM Producer Price Index release.
On paper, it is a quiet tape. In reality, it is a market wound tight, where one data point could dictate the next leg.
The current range compression says a lot.
For nearly two weeks, /ES has been coiling in a band just above 6,450, refusing to give back ground.
That is often the mark of institutional positioning ahead of a catalyst.
Today’s PPI, especially the core reading, is the trigger. The headline number matters less, what drives futures is how traders see inflation momentum evolving into the Fed’s September meeting.
Gold is the clearest tell on sentiment. Futures are pushing above $3,359 for the third straight day, backed not just by rate cut bets but by political pressure on the Fed.
Treasury Secretary Scott Bessent openly floated a 50 basis point cut, calling current policy “too constrictive.”
The first break will set the tone for months. Oil, gold, and equities are all coiled at make-or-break levels. WTI futures at $63.02 are up slightly on the day but still deep in negative territory year over year. The market has priced in a geopolitical premium ahead of Trump’s meeting with Putin, but the IEA’s forecast for a record surplus in 2026 keeps the fundamental tone bearish. Structurally, this still looks like a bear market rally rather than a true reversal.
The labor market backdrop adds another layer. Jobless claims at 226,000 and continuing claims at their highest since 2021 are feeding the rate cut narrative. This is the loop that drives futures positioning, softer jobs data boosts easing expectations, which supports equities and gold, while weighing on the dollar and yields.
Agricultural markets are steady but firm, with soybeans, corn, and wheat inching higher.
It is a reminder that not all futures volatility is tied to macro headlines, seasonal flows and trade dynamics can still produce consistent trends.
Markets may look calm, but beneath the surface, they’re loaded with potential. This is how I prepare when silence comes before the storm and why structure matters most when the fuse is lit.
For traders, the inflection points are clear: /ES needs to hold above 6,450 to keep the breakout narrative alive, gold above $3,350 to confirm safe-haven momentum, and crude above $63 to avoid slipping back into the downtrend.
Today’s PPI will decide whether those levels hold or crack.
In compressed markets like this, the first move after the data is often noise. The second one tells you where real money is going. That is the one worth trading.
See you in the next one.
Imre Gams
Editor, The Trading Room
