STRATEGY UPDATE | AUGUST 12, 2026
Trading System Signals for August 12, 2026
MARKET ENVIRONMENT
Volatility Falls as Nasdaq Futures Settle Into a Quiet August Session
The VIX was crushed today, reaching a fresh 2026 low of 14.39, just below the previous January low of 14.42. The Nasdaq-100 futures also traded in an unusually narrow range of less than 200 points.
This morning's CPI report came in near consensus, producing relatively little sustained market movement. Attention now shifts to tomorrow's PPI report, which could provide the next volatility catalyst.
Overall, the market has become noticeably quieter following the approximately 2,700-point, four-trading-day Nasdaq rebound that began on July 31.
The 15 level in the VIX has acted as an important support area, and volatility has now moved below that threshold. We are also entering the traditional August summer doldrums, when vacation schedules and the return to school can contribute to lighter market participation.
That could lead to more quiet trading sessions this month, but the recent price action also raises an important question about what comes next.
WHAT WE ARE WATCHING
The four-day, approximately 2,700-point Nasdaq rebound that began on July 31 was extremely strong. We have anticipated that the broader trend could continue to new highs, with 32,500 remaining a potential upside level if momentum resumes.
However, the market has now moved largely sideways for six trading days. The bullish scenario remains intact, but tomorrow's PPI report introduces an important near-term risk. A higher-than-expected inflation reading could quickly trigger another selloff.
Another question is how much of the recent rebound was connected to the forced liquidation of Leopold Aschenbrenner's Situational Awareness portfolio and Citadel's acquisition of many of those positions near the market's pivot lows. Was that dislocation primarily a short-term catalyst for the rebound, and how much institutional supply could return to the market as those positions are subsequently managed or reduced?
There is always another catalyst around the corner. Tomorrow's PPI report could quickly bring wider price movement back into the market, especially after several days of compression.
Our approach remains unchanged: we continue to trade diversified long-and-short intraday portfolios rather than attempting to predict exactly when the next volatility expansion will occur.
DAILY REPORT
Hypothetical Trading System Signals for August 12, 2026
Results shown are hypothetical and do not represent actual client-account performance.
| Portfolio / System | Hypothetical Result |
|---|---|
| 18 System Portfolio NQ | -$3,290 |
| 7 System Portfolio NQ | -$985 |
| 3 System Portfolio NQ | -$535 |
| 2 System Portfolio NQ | -$535 |
| Diversified Portfolio 57, NQ Only | Updating... |
A quiet trading day does not necessarily imply a quiet period ahead. Our focus remains on following the individual systems and allowing multiple independent strategies to respond as market conditions change.