Nasdaq Futures Trade Review & Commentary - July 22, 2026

Date: 2026-07-22

URL: https://youtu.be/2H_qpeIp2rY?si=JMpn373SUNmn-TD3

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Hello, folks. How are you?

I hope you’re doing well.

All right, so we’re looking at Nasdaq again.

We’re keeping things simple, without a long list of markets to analyze.

Everything I’m teaching here is applicable to everything else, okay?

So just be mindful of that.

And we’re looking at it through Regular Trading Hours.

So overnight last night, we had a lot of price action just hanging above that 1-hour buy-side imbalance, sell-side inefficiency from noon Eastern Time last Wednesday.

If you’ve been watching the last few lectures and commentaries, you know what that buy-side imbalance, sell-side inefficiency is.

So we moved back into Monday’s Regular Trading Hours Opening Range Gap, as I stated we would likely do overnight going into this morning’s session.

And we opened down here for Wednesday’s Regular Trading Hours session at 9:30 Eastern Time.

So we had a discount gap.

Then price worked its way back up into consequent encroachment of today’s discount Regular Trading Hours Opening Range Gap.

It did so before 10:00, so there’s our 70% likelihood of that occurring.

Not a bad run from here to there.

That’s 100 handles or more from the opening to that level.

We worked into yesterday’s first presented fair value gap.

So that’s what this level is.

And we’ll look at it from the perspective of Electronic Trading Hours in a moment.

But price moved higher and traded all the way up into—

Let me add the highest octant.

See that?

Now, that’s where the bodies stop on the rally higher.

That’s interesting.

It’s probably random.

Then we come back down to consequent encroachment of today’s Regular Trading Hours Opening Range Gap.

We bang around a little bit, break lower, and trade right back into—wouldn’t you know it—Tuesday’s first presented fair value gap.

Okay, I used this to go short.

So we’re going to look at that now.

Just so you guys know, we have a little unfinished business up here in today’s Regular Trading Hours Opening Range Gap.

We also have relative equal highs up here.

There’s buy-side liquidity resting above them.

I think they’re going to want to take price up there.

If it doesn’t happen today, we’ll be looking for that going into tonight and throughout the rest of the week.

Electronic Trading Hours—let’s go into that.

All right, so we’re over here.

Price is fading lower.

I gave you this gap last night in the commentary.

So price made one more attempt to trade above it.

Buy-side imbalance, sell-side inefficiency right here.

We break lower and then come back up into the gap I showed you last night.

Beautiful delivery.

Look at the bodies being left right here.

Then we break lower.

There’s a fair value gap right in here, formed just before we took out the high.

That acts as an inversion fair value gap, and price rolls over.

We trade into Tuesday’s first presented fair value gap.

That’s what this is right here.

Then we sell off.

This is all overnight.

And right in here, price hits those relative equal highs.

It hammers into them.

It slams directly into that liquidity.

We have a high right before the higher high is taken out.

You can see this small volume imbalance here, from the low up to that point.

So right in here, where it’s pink, this is based on its first utilization.

Both of these gaps are being shown based on the characteristic of their first utilization.

That is not first presentation.

First presentation refers to the time when it formed.

How it forms determines its first utilization.

By that, I mean this candlestick opened with a small volume imbalance between these candles here.

Then we rallied up and formed another small volume imbalance here.

So this is a buy-side imbalance, sell-side inefficiency.

If the market were bullish, this should have supported price and sent it higher.

But I told you last night that we were going lower.

So if it fails, it will act as an inversion fair value gap.

The first utilization here would look bullish as well if the market were bullish.

But I told you last night that the market was bearish.

We hit Tuesday’s first presented fair value gap.

It hits it beautifully.

Nice, sharp sell-off.

Okay, so in this little area here, that’s my first opportunity to see this change from its first utilization as a bullish PD Array, if the market were bullish.

But my view is that the market is bearish.

So I’m going to use this bullish PD Array and apply the inversion aspect.

Then this is a breaker.

So we have a high, a low, a higher high, and the down-close candle with the lowest close.

That’s this one right here.

That’s what I annotated.

If you had used these two consecutive candles here and taken the low of that, there’s nothing inherently wrong with it.

You would feel much more victorious regarding where price trades because it touches that level there.

But done the way I teach it, this is how it really is.

So my interpretation—my interpretation, rather—is that this is the real breaker, and price failed to touch it.

So if my PD Arrays that should perform as premium arrays cannot even be traded to, what does that indicate?

By my definition, as Michael Huddleston, the author of all these concepts—Smart Money Concepts—order flow is this:

If a premium PD Array cannot be traded to, if its consequent encroachment cannot be traded to, or if price cannot leave a body in its respective upper half, that is bearishness.

If it cannot even touch it, as it does here, that is extremely bearish.

Very, very interesting, isn’t it?

Look how quickly this drop unfolds.

It’s wonderful.

So from this entry up here, I rode it all the way down to the level I told you we would reach for overnight and throughout the last two days, which is Tuesday’s Regular Trading Hours Opening Range Gap consequent encroachment—the midpoint level.

And I used this low, then split the distance to that old consequent encroachment level at 28,998.25.

That’s this red line here.

And this old area here, I split that in half.

I used the event horizon.

So from the three contracts I was short, I took one off right there, one halfway between this low and Monday’s consequent encroachment, and then I took the last one off just below Tuesday’s Regular Trading Hours Opening Range Gap consequent encroachment.

And it drops aggressively here, completely washing out anyone who may have gone long at consequent encroachment.

It absolutely decimated them, which was diabolical.

Then price rallies.

And in bullish order flow, every fair value gap and down-close candle begins supporting price.

It’s in a hurry.

What is it going to do?

It’s going to run directly back up into that 60-minute buy-side imbalance, sell-side inefficiency.

And it trades right to the highest octant before reaching the close of today’s Regular Trading Hours Opening Range Gap.

Okay, so this is where we are now.

I think the last month and a half has been a pretty good testimony to how these things work and how consistent they are.

Yesterday, we were forced into a high-resistance liquidity run condition.

You can see that even in my own hands, it’s going to be very difficult.

But when the market delivers everything the way it’s supposed to, I gave you the expectation last night that we were going lower.

We were going to trade into Tuesday’s Opening Range Gap, always aiming for consequent encroachment.

It doesn’t have to happen on the same day.

Yesterday, we were aiming for Monday’s Opening Range Gap consequent encroachment.

Then overnight, I told you we would probably trade lower and move into that gap again.

We did.

And we also traded into Tuesday’s first presented fair value gap.

I’d like to see if price can reach above the 29,352 level.

Then I would be content with that for today.

So that’s a little review for this morning.

Hopefully, you guys got something out of the last couple of lectures this week.

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