Cannon Pre-Market Briefing — Friday, August 7, 2026

ACT ITrade Today

What's the setup, and what do I do before the bell.

01 — THE 90-SECOND READ

A Hot Number Is the Bearish Outcome, and Almost Nobody Is Positioned for That.

REGIME

Positive gamma,
inverted data reflex

Dealers are long gamma into a binary print, which suppresses the move until it doesn't. The unusual part is the sign: with a cut priced out entirely and a September hike better than a coin flip, strength in the labour data tightens conditions rather than validating the rally.

The reflex is backwards
The September meeting carries roughly 60–65% odds of a hike and zero of a cut, and all three dissents at July's 9–3 hold wanted to tighten. A beat on payrolls is not a growth story this morning; it is a rate story.
The bar is low
June printed +57K against 115K expected, April and May were revised down a combined 74K, and Wednesday's ADP came in at +44K against 75K. The skew of surprise is toward a miss — now the outcome equities would rather have.
The sell signal fired harder
BofA's Bull & Bear Indicator moved up rather than settling in this morning's Flow Show, deeper into sell territory than at any point in five years. The mechanism behind Michael Hartnett's bear case is the Fed being forced into aggressive tightening — precisely what 8:30 could deliver.
The tape is fine
Participation has widened sharply: the share of the index above its 50- and 200-day averages has gone from roughly half in late July to around two-thirds, equal-weight is beating cap-weight by 2.2 points on the year, and chips are tracking their best week since May even after memory got hit.
Two record analogues, opposite conclusions
Tom Lee wants the index up another 3.6% by month-end. Jonathan Krinsky reversed himself in two days to point out that the four-session surge which produced these highs has three precedents in thirty years, and two of them were tops.
Metals are shouting
Gold and silver are both sharply bid pre-market, alongside firm equity futures and a stronger dollar. Silver is outrunning gold two to one. A simultaneous bid in metals, stocks and the currency is not a risk-off trade and it is not a geopolitical one either.

02 — THE SCOREBOARD

The Board & Yesterday's Calls

Instrument	Last	Chg	Reference
E-mini S&P Sep ES	7,751.00	+16.25	Prior settle 7,734.75. Trading above its daily pivot.
E-mini Nasdaq Sep NQ	29,643.00	+154.75	Leading. Composite back above its 50-day.
E-mini Dow Sep YM	54,056	+43	Cash snapped its record streak Thursday.
E-mini Russell Sep RTY	3,019.80	+10.70	Cash closed 3,001.55. The payroll-sensitive one.
S&P 500 cash Thu close	7,709.96	−0.18%	Closing record 7,736.52, Aug 4. Intraday 7,793.68, Aug 5.
2-year Treasury	4.235%	−1.0bp	The rate market's hike tell. Flat into the print.
10-year Treasury	4.662%	−0.8bp	2s10s +42.7bp. DXY 99.98, EURUSD 1.1530.
30-year Treasury	5.210%	−0.2bp	The long end will not rally.
Gold spot	4,324.29	+2.01%	Bid alongside equities, not against them.
WTI Sep	76.86	−0.56%	Settled 77.29, +2.75%.
Bitcoin	65,094	+1.11%	Roughly 48% under its 52-week high, with the S&P 1% under a record set Tuesday.

Sentiment & Flow Gauges

Gauge	Reading	What it says
BofA Bull & Bear Indicator	9.7	SELL ZONE From 9.4. Highest since 2021.
AAII bull / bear	37.0 / 38.0	Spread −1.0. Fear & Greed at 60, greed but not an extreme.
VIX	15.22	No fear priced into a binary morning.
Net dealer gamma	+$48.5bn	POS GAMMA Thursday's close. Spot sits about 220 points above the flip — deeply vol-suppressing. Levels in section 04.
Equity ETF net issuance	+$39.9bn	From $20.8bn prior. Mid and small in, mega-cap core out.
S&P above 50-day / 200-day	64% / 69%	From 48.5% and 51.3% in late July. Real broadening.

The flow read carries a contradiction worth naming. In the week to Aug 5 money went into everything at once — $32.9bn to equities, $23.1bn to bonds, and a colossal $53.7bn into money funds — and it is that indiscriminate appetite, plus tighter high-yield spreads, that drove the contrarian gauge to a five-year high. The composition of the equity money, though, is defensive in a way the headline hides: mid- and small-cap value took in more than ten billion while mega-cap core vehicles bled. The exposure, not the opinion, is what is stretched.

Yesterday's Calls Graded

HIT

Cannon Desk — gold rising with equities is an intervention nobody is pricing, not a geopolitical hedge. Both metals rallied hard overnight with equity futures firm and the dollar bid — the third consecutive session in which the two complexes have moved together rather than against each other.

HIT

Cannon Desk — the crowded Nasdaq short sits under an index whose de-risking is behind the tape, not in front of it. NQ leads the board this morning, the Composite reclaimed its 50-day, and chips are having their best week since May.

MISS

Jonathan Krinsky, BTIG — carried from Aug 3 as expecting strength in semis and the momentum trade in early August. He abandoned it himself within two days, and now reads the same momentum complex as showing a top-like signature.

OPEN

Tom Lee's end-August target, Ed Yardeni's 8,250 year-end, Michael Hartnett's retreat-and-rotate, and Mike Wilson's "semis may bounce, but they are unlikely to be the leader again" all carry forward. Semis are bouncing; leadership is the open half.

03 — CALENDAR & SCENARIO MAP

One Number, Two Directions, No Symmetry

Time ET	Event	Cons.	Prior
08:30	Non-farm payrolls, July	+85K	+57K
08:30	Unemployment rate, July	4.2%	4.2%
08:30	Average hourly earnings, m/m	+0.3%	—
08:30	Average hourly earnings, y/y	+3.5%	—
10:00	Richmond Fed's Barkin, NABE fireside	—	—
15:00	Consumer credit, June	—	—

Street estimates run wide — LPL +75K, Fifth Third +90K, Wells Fargo +95K, Barclays +100K — and both LPL and Cannon's own desk preview look for the jobless rate at 4.3% rather than unchanged.

Payrolls, 08:30 ETES ref 7,751 · Sep pivot 7,744.92

COOL — BELOW ~60K, OR JOBLESS RATE TO 4.3%

The September hike leaves the front of the funds strip, the 2-year gets its first real rally in weeks, and small caps are where the beta sits — watch RTY against its 3,019.10 pivot rather than the S&P. The qualifier: below roughly 25K a weak print stops being a rates story and becomes a growth story.

HOT — ABOVE ~120K, OR AHE ABOVE +0.4%

The September hike moves toward a done deal and the front end leads. A break of 4.30% on the 2-year would be the market's first clean statement that it believes September. Under long dealer gamma the index reaction is likely compressed relative to the rate move — which historically resolves later rather than smaller. Defensives, duration and REITs are the crowded destination here, and section 10 has a reason to look at that twice.

Positive gamma normally means a print gets absorbed rather than trended. The qualifier today is that both walls sit close — the put wall is roughly 10 cash points beneath spot and the call wall roughly 40 above — so the absorption band is unusually narrow for a payroll Friday.

04 — PIVOT POINTS & GAMMA MAP

Where the Options Book and the Pivot Grid Agree

Sep contract	S2	S1	Pivot	R1	R2
ES E-mini S&P	7,698.42	7,719.08	7,744.92	7,765.58	7,791.42
NQ E-mini Nasdaq	29,046.67	29,297.08	29,491.67	29,742.08	29,936.67
YM E-mini Dow	53,511	53,773	54,225	54,487	54,939
RTY E-mini Russell	2,984.50	2,997.20	3,019.10	3,031.80	3,053.70
GC Gold, Dec	4,234.33	4,269.97	4,316.83	4,352.47	4,399.33
CL Crude, Sep	73.12	75.43	76.88	79.19	80.64
SI Silver, Sep	59.93	60.94	62.13	63.14	64.33

Dealer Gamma Map

Gamma level	SPX	ES Sep · +24.79	Role in today's tape
Call wall	7,750.00	7,774.79	Ceiling. Splits R1 and R2, and the level a hot print must clear before dealer hedging works with the move.
Max pain	7,650.00	7,674.79	Today's expiry magnet, and two points from the pivot grid's S3 at 7,672.58.
Put wall	7,700.00	7,724.79	Floor — the first level where dealer hedging works with a decline rather than against it. Sits essentially on top of S1 at 7,719.08.
Gamma flip	7,490.78	7,515.57	Regime boundary, roughly 220 points and 2.9% beneath spot. The book is emphatically long gamma; nothing today plausibly reaches it.

The confluence in the two tables above is unusually tight, and it is worth stating plainly. September ES carries a 24.79-point premium to cash, and translating the options book across at that basis lands the put wall within six points of the pivot grid's S1 and max pain within two points of S3 — from two methods that share no inputs. One is built from yesterday's range, the other from where dealers actually carry inventory.

Agreement does not make either method correct. It means that if the tape trades through one of those prices, two separate mechanical bids stop defending at once — the condition under which a positive-gamma morning stops absorbing and starts moving. Above spot the first genuine test is ES 7,765; cash moving averages sit far below at 7,688.96, 7,531.33 and 7,495.41, so no trend structure is threatened by a bad morning.

One qualifier, stated rather than glossed. The flip above is a fresh read from a widely-followed dealer gamma model, and other models put it between 7,475 and 7,630 this week — so treat it as a band around 7,500 rather than a hard line. The direction is not in doubt, and the vol-suppression it implies is why a binary print may land smaller than it deserves to.

Cannon Daily Levels: market overview, trend and 52-week range

Cannon Daily Levels · Trend & 52-Week Range

Cannon Daily Levels: pivots, support and resistance

Cannon Daily Levels · Pivots, Support & Resistance

ACT IIThe Read

Who is driving it, and what changed since yesterday.

05 — INSTITUTIONAL POSITIONING

New Voices and Moved Positions

Michael Hartnett · Chief Investment Strategist, BofA MOVED

The Flow Show published this morning and the indicator moved up rather than settling. The drivers are not equity euphoria — they are high-yield inflows, tighter high-yield and AT1 spreads globally, and improving breadth outside the United States. That is the awkward part: the gauge is at a five-year extreme because the credit market is behaving well, not because anyone got carried away in stocks.

His instruction is unchanged and now carries a fresher date: retreat and rotate rather than reload, into duration, defensives and staples, high-dividend equities, REITs, small caps, biotech and the US dollar. The trigger he has named repeatedly is the Fed being forced to restore credibility through aggressive hikes, with Jackson Hole flagged as the date.

Jonathan Krinsky · Chief Market Technician, BTIG BULL → BEAR

A two-day reversal, both halves on the record. On Aug 3 he told CNBC he expected strength in semis and the momentum trade in early August. On Aug 5 he wrote to clients that the S&P's climb of more than 5% over the four sessions ending Aug 4 has occurred only three other times in thirty years — April 1999, March 2000 and November 2020 — and the March 2000 instance arrived one day before the dot-com peak. His framing of the bull case is the line to carry: "The bulls will hope it's November 9, 2020. We have our doubts."

His objection is to the mechanism, not the level: "the market has been playing musical chairs as money has sloshed from momentum, to value, and now back to momentum." His illustration is Microsoft, up nearly 27% across those four sessions after falling roughly 37% over the eleven months from its July 2025 peak. A move that size in a mega-cap over four days is not a re-rating; it is a positioning event.

Tom Lee · Head of Research, Fundstrat TARGET SHARPENED

No directional change, but he has put a number and a month on it. The target went out on the wire at 9:15 AM Thursday — 7,900 to 8,000 this month — six hours before he said it on Closing Bell alongside Solus's Dan Greenhaus. His case is technical momentum, accelerating earnings and broadening strength: the Nasdaq-100 above its 20-, 50- and 200-day averages, leadership widening into software, memory and digital assets.

Two things to hold against it. His standing forecast of a 10–20% drawdown across August to October did not resurface anywhere this week. And his own firm puts $18.44 of second-quarter S&P earnings per share in "investment gains" rather than operations, with organic growth around 21–22% against 13% a year ago — strong, but not the headline number. Section 10 returns to the gap.

Mark Newton, CMT · Global Head of Technical Strategy, Fundstrat NEW ITEM

The observation nobody else made this week, posted Thursday evening: "Noone's talking about both REITS and Utilities breaking down sharply this week." He describes a violation of the rising 40-week moving average, with relative charts against equal-weighted S&P worse still, at their lowest in years. His daily note separately reads the index constructively — a two-day consolidation he calls buyable, with the Nasdaq ETF likely to test all-time highs in August.

Both halves matter and they do not conflict: the index is fine, the defensive complex underneath it is not. Note that Newton and Tom Lee sit at the same firm and are calling different things — "Fundstrat says" is not a usable attribution today.

Torsten Sløk · Chief Economist, Apollo FRESH

Published at 4:22 this morning, the earliest substantive item on the board: AI capital expenditure is building at roughly twice the pace the housing boom did, from 1.4% to 3.1% of GDP, about 0.85 points a year. The point is not that the spend is unjustified, but that a build-out constructed at that speed can be unwound at that speed, and the dependence on it was assembled inside two years. Private business investment in AI-related categories rose roughly $300bn year-over-year last quarter to a record $1.5 trillion annualised — the growth engine doing the work the labour market is not.

Liz Ann Sonders & Kevin Gordon · Charles Schwab MOVED

The cleanest positioning work of the week, and it lands on a split. Sentiment surveys are subdued; exposure is not. Margin debt as a share of nominal GDP is at an all-time high, matching the peaks of 2000, 2007 and 2021, with household equity allocations near records — while retail is de-risking and funds and systematic strategies hold conviction, the opposite of the usual pattern. Their contrarian signal cuts the other way: a widely followed ETF speculation index flipped from extreme optimism to extreme pessimism inside two weeks, generating a buy signal. Separately this morning, Gordon and colleague Collin Martin name today explicitly as a "good news is bad news" print.

06 — DESK SHIFT TRACKER

The Board of Voices

Voice	Stance	Position & what changed
Michael HartnettBofA	BEAR	Sell signal deepened this morning. Retreat and rotate, with a forced Fed as the trigger.
Mike WilsonMorgan Stanley	BULL	Target 8,000, sourced Aug 3, unchanged. "The rotation towards quality has begun, and I don't view that as a bearish development." On semis: "Semis may bounce, but they are unlikely to be the leader again."
Tom LeeFundstrat	BULL	Sharpened to a month and a range rather than a year-end number. Drawdown warning dormant.
Scott RubnerCitadel Securities	BULL	"July did not change the structural bull market. It reset it." Tech retail selling exceeded prior records by more than 80%.
Jonathan KrinskyBTIG	BEAR	Reversed within two days. The momentum complex now carries a top-like signature.
Ed YardeniYardeni Research	BULL	8,250 year-end, street high, unchanged. The Fed should be tightening and equities are fine anyway. See section 09.
Torsten SløkApollo	CAUTIOUS	New this morning on the speed of the AI build-out and the symmetry of an unwind.
Ellen ZentnerMorgan Stanley WM	DOVISH	NEW No hike. The most contrarian rates call on the board. See section 09.
Mark NewtonFundstrat	BULL	Constructive on the index. Alarmed about REITs and utilities.
Katie StocktonFairlead Strategies	BULL	Turned constructive Aug 5: index out of consolidation, more breakouts, momentum favours adding exposure.
Andrew KreiCrescent Grove Advisors	BULL	NEW "Momentum trade still has legs" — the direct counterpoint to Krinsky, one day apart.
James TaylorTaylor Group of Wells Fargo Advisors	BULL	NEW Breadth of earnings "is really the story right now." A private-wealth practice, not a research desk.
Subramanian & HarveyBofA; CIBC	BEAR	The street lows, both stale: 7,100 and 7,450 for year-end, roughly 610 and 260 points beneath spot. Neither has been revised.

07 — MACRO PRESSURE MAP

Where the Data Is Actually Pressing

Pressure	State	Read
Labour	DETERIORATING	Three consecutive soft signals into today: June's miss, the April–May revisions, and Wednesday's private-payroll read at little over half consensus.
Inflation	STICKY	Second-quarter price deflators ran 3.8% and 3.3% year-over-year, core PCE the latter. June's monthly core came in at +0.1% against +0.2% expected — the one encouraging print in the set.
Growth	MODEST	Q2 real GDP +1.5%. The level is not the problem; the composition is, with the AI build-out carrying an outsized share.
Energy	EVENT RISK	Hormuz. Thursday ran slip-then-jump — early weakness on Iran–Oman progress, then a 4% surge after Iran's Fars News reported legislation under review to bar vessels of the US, Israel and other "hostile" nations, with fines up to 20% of cargo value. Brent settled 82.49, WTI 77.29; both give a little back this morning.
Dollar	CONTESTED	Firmer after its worst week in three months. Treasury is pushing the Fed to widen the FIMA repo facility to support Japan's currency defence. No new tariff action.
Overseas	SUPPORTIVE	Shanghai +1.0% on Chinese exports up 24% year-over-year; Hang Seng +0.5%, Nikkei −0.1%. Europe firm: DAX +0.7%, FTSE +0.5%, Stoxx 600 +0.24%.
Natural gas	WEAK	Near a three-month low around $2.64 on record production of 110.7 billion cubic feet a day — a disinflationary offset nobody mentions alongside the crude story.

The map carries a contradiction the payroll print will start to resolve. The labour side has produced three soft readings in a row — normally a rate-cut sequence. The inflation side has produced deflators a committee with three hawkish dissenters cannot ignore. The funds market has settled that argument entirely in favour of inflation, and if today's number is soft enough that settlement gets tested for the first time since the July meeting.

08 — PORTFOLIO POSITIONING

The Names That Own Today

Name	Move	Why it matters
The Trade Desk TTD	−27.5%	Revenue $715m against $751m expected, and a third-quarter guide of "at least $650m" against $805m consensus — a 12% year-over-year decline. The finance, marketing and commercial chiefs were all replaced the same day. A guidance miss plus a simultaneous management clear-out is a different event.
Atlassian TEAM	+30%	Revenue $1.8bn, up 28%, cloud up 31%. The asterisk: fiscal 2027 guided to roughly 13% growth. The market is paying for the quarter, not the guide.
Cloudflare NET	+15%	Revenue $696.1m, up 36%, full year raised. Infrastructure software is where the beat rate is holding.
Doximity & Airbnb DOCS, ABNB	+71%, +8%	The largest single-name move on the board, and a discretionary beat — $1.37 against $1.25 — into a soft labour tape.
Memory & storage WDC, SNDK, MU, STX	−6 to −16%	Western Digital and SanDisk both beat and were sold on guidance against year-to-date gains of 469% and 202%. A positioning unwind, not an earnings failure — and the AI hardware fault line has moved from graphics processors to memory.
SpaceX	Unlock	911.5 million shares, roughly $101bn, unlocked Thursday, taking the float from 4.9% to 11.8%. The stock popped more than 6% intraday and gave most of it back, and a further 455.8 million shares stay locked because the price is beneath the $135 offer. Dan Ives of Yorkville Ives, on Closing Bell: investing in it is a bet on Musk.

The structural bid underneath all of this is mechanical rather than fundamental. Whatever today's number does to the rate market, corporate buyback eligibility widens from roughly 45% of the index by weight to 85% over the next ten sessions. The largest reliable buyer of US equities is coming back on line, and it does not read the payroll report.

09 — FED WATCH

Priced to Tighten, Argued Both Ways Inside Twelve Hours

Metric	Level	Note
Fed funds target	3.50–3.75%	Effective rate 3.63%.
September FOMC, hike	~60–65%	Sep 16 meeting.
September FOMC, cut	0.0%	The number that defines this morning.
July FOMC vote	9–3 hold	All three dissents were for a hike.
Jackson Hole	Aug 28	Chair Warsh speaks. Flagged by both cases as the pivot date.

Ed Yardeni published at 10:50 Thursday night, and it is the clearest statement of the hawkish case on the board. It is built on reporting that Warsh is "prepared to raise interest rates at September's meeting if inflation readings released in coming weeks are hot." Yardeni's answer is that they already are. On the chair: "He has been unequivocal about his commitment to restore price stability. He just hasn't done anything about it so far. Nor has he provided any information about the Fed's reaction function under his leadership." On the signal he trusts: "We've been monitoring the 2-year Treasury yield, which is unambiguously calling for rate hikes." On whether Jackson Hole clears anything up: "We doubt it."

Six hours earlier, on Closing Bell, Ellen Zentner of Morgan Stanley Wealth Management answered the same question in seven words — "The Fed is not going to hike" — in a segment framed explicitly around the hike risk. She sits at Wealth Management, not Morgan Stanley Research, so this is not the house view carrying Wilson's index target. The whole disagreement fits in one window: one strategist says the committee will not hike, another says the chair's own aides are signalling it might, and the funds market has sided decisively with the second.

What makes it tradeable rather than academic is that Yardeni's chosen instrument went into the print essentially flat. The market he says is unambiguously calling for hikes has not moved ahead of the data that would confirm it. The front end expresses conviction first, and it is currently expressing none.

The September probability above is given as a range because the funds futures strip and the probability model sit about five points apart this morning. The last officially published print earlier this week fell inside that range.

ACT IIIThe Edge

What everyone else is not saying this morning.

10 — WHAT THE CONSENSUS IS MISSING

Three Things

The loudest bear on Wall Street is not hoping for a weak number. He is hoping for a strong one.

Every desk note this morning frames the print the same way: a soft number is bad for growth, a strong number is good for the economy but bad for rates. Both readings treat the labour data as the variable and the Fed as the reaction. Hartnett's bear case runs the other direction. His stated trigger has never been a recession — it is the Fed being "forced to restore credibility via aggressive hikes." He wants the tightening. A hot payroll does not refute his position; it is the specific input that position has been waiting on since the spring.

The sequencing is the part to hold onto: the gauge went to its five-year extreme before the trigger arrived, not after. If today runs hot, the two halves of that thesis line up for the first time, three weeks ahead of Jackson Hole.

The defensive destination everyone is being pointed toward broke down this week, and nobody has put the two calls side by side.

The rotation instruction is nearly universal among the cautious: out of momentum, into duration, defensives, high-dividend equities and REITs. It is the natural expression of a hike-risk print, and it is where a lot of money goes if 8:30 runs hot. Mark Newton spent Thursday evening pointing out that the destination is already broken — a violated 40-week moving average and relative charts at multi-year lows, on the evening before the print that would send money there.

The implication is not that Newton is right and Hartnett wrong. It is that rate-sensitive defensives are a poor hiding place from a rate shock, and the flow has been pre-committed to them anyway. A 30-year at 5.21% that will not rally is the same statement in a different market.

The earnings number the bulls are quoting is 47.4%. Strip out two companies' one-off gains and it is 28.8%.

The strongest leg of the bull case this week is earnings, carried by an extraordinary set of figures: 61% of the index reported, an 86% beat rate, a record aggregate surprise of 31.4%, blended growth of 47.4%. James Taylor went on Closing Bell to say the breadth of that beat "is really the story right now," and on the surface he is describing something real.

The same data set carries a second number almost nobody quotes. Excluding one-off gains at two companies, blended growth is 28.8%. A Goldman desk note on Thursday made the structural version of the argument — that much of the record growth is mark-to-market appreciation on large technology firms' equity stakes rather than operating profit. Fundstrat arrives in the same place from the bullish side by a different route.

That is still excellent growth, but it is a different animal from forty-seven, and the gap is not a rounding issue — it is the difference between an operating boom and a mark-to-market one, with a forward multiple of 19.6 sitting on top. The breadth argument and the earnings-quality argument are reading the same spreadsheet to opposite conclusions, and only one of them is on television.

Eli G Levy

Cannon Pre-Market Briefing · Contact Cannon Trading Company
eli@cannontrading.com · cannontrading.com

Free. Always.

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The Only July Payroll Number That Can Hurt This Tape Is a Strong One.