Daily Brief - Friday, 5/23/25
From Quiet Coil to Violent Break — NQ Drops Hard on Trump Early Morning Barrage
Disclaimer
This publication and its authors are not licensed investment professionals. Nothing posted on The Shmuts blog should be construed as investment advice. Do your own research.
Catch me on Twitter @TheShmuts during the day covering the session as it develops.
News Docket
No economic data releases today.
Prior Session Analysis - Thursday, 5/22/25
Session Stats
Open: 21,171.25
High: 21,337.50
Low: 21,113.75
Close: 21,183.50
Settlement: 21,178.25
Range: 223.75 pts (895 ticks)
Volume (Est.): 513,605
Open Interest (Prelim, NQM5): +474
Value Area (Market Profile)
Value Area High (VAH): 21,300.00
Point of Control (POC): 21,265.00
Value Area Low (VAL): 21,200.00
Prior Session Breakdown - Market Profile and NY Session
Market Profile View – 30-Min Chart
Thursday’s session was a Normal day with all price action contained within the Initial Balance and also an Inside Day, staying fully within Wednesday’s range. On the weekly chart, this extends the alternating pattern we've seen all week: Inside Day → Outside Day → Inside Day — which makes today a candidate for a breakout or Outside Day, especially with signs of an overnight gap forming.
We briefly looked set to open with a downside gap, but stronger-than-expected job data at 8:30am closed that gap, and we opened in-balance. From there, we got an initial drive up that stalled just shy of 21,340 — a level tested several times during the session and ultimately respected as resistance.
On the downside, the prior session’s POC at 21,174 served as reliable support. It was tested twice but never broken.
Structurally, the profile showed excess at the bottom of the range, forming right off the open. However, there was no excess at the high and instead a weak high at 21,337, where sellers failed to defend with conviction.
We did see a late-day downside spike, with the base at 21,325. This move failed to attract strong buyer response into the close — a detail that may hint at potential bearish continuation into today.
5-Minute Chart Breakdown – NY Session
The 5-min chart confirmed what the profile suggested — a range-bound, low-tempo session with opportunity mostly limited to short-term range trades. After the morning drive stalled out, the session turned into a rotational day with price rotating between the day’s extremes with little momentum either way.
The late-day spike into the close stood out — not for its intensity, but for the lack of responsive buying afterward. If that pressure builds today, it may finally be enough to push us out of this compression range.
Volume & Participation
Open Interest: +474 — Small OI gain, nothing directional
Volume: ~513k — Consistent with recent session averages
Range: 224 points — Tight again; compression continues
Final Thoughts
We continue to compress — and compressions eventually break. Thursday’s session didn’t offer much directional clarity, but the developing structure, weak high, and late-day spike could be early signs of an attempted move today.
The broader Inside/Outside pattern also suggests a bigger day may be coming soon — possibly today, especially if we do open out-of-balance and see directional conviction.
Range compression leads to expansion.
Today’s Analysis – Friday, 5/23/25
Market Context
Well, Trump woke up swinging.
Overnight inventory is very short, currently trading ~360 points below yesterday’s settlement and ~300 points below yesterday’s range. So yes — that answers the question about whether we’ll get an Outside Day today. It’s already happening.
Here’s what set it off:
Trump threatened Apple with tariffs if they don’t move iPhone production to the U.S. (as if building factories was as easy as flipping a switch).
He also announced a 50% tariff on the EU starting June 1st, blaming them for stalled trade talks. While this isn’t entirely surprising — the EU has always been tough to negotiate with — the market isn’t taking it lightly.
As I write this, price is already well below 20,800 and still falling. Headlines are clearly driving today’s narrative, and that likely won’t change. Volatility will be the theme, and the range could be wide in either direction.
Stay objective today. Watch the tape. Watch the headlines. Be prepared for anything. We’re ~400 points down already — how RTH participants respond is the real question now: Do they fade the move and try to fill the gap, or does the selling intensify?
Bias & Mindset
Bias: Bearish
If the market is already down 400 points, there’s no reason to fight it. My plan today is straightforward: ORB and failed gap fill setups only.
I don't expect technical levels to matter much today — this is a news-driven market, and price action plus order flow will be my primary signals.
⚠️ If today turns into a trend day down, do not fade it.
This is how most traders blow up — trying to outsmart a market that doesn’t care. Either ride the trend or sit out. There’s no prize for picking bottoms.
Key Levels I’m Watching Today
Upside:
21,325 — Base of yesterday’s late-day bearish spike
21,174 – Wednesday’s POC; former support, could become resistance
21,113 – Yesterday’s low; reclaiming this would show buyers defending prior value
21,000 — Always have to include the psychological levels
Downside:
❗ None with high confidence.
Price moved up so quickly earlier this month that there’s very little structure below current levels. It’s air. If selling accelerates, there’s a lot of room to fall.
Final Note on Today
This is not a normal session. News is in the driver’s seat, not levels, not structure. If today is volatile — and it almost certainly will be — stay sharp, trade what you see, and don’t try to be a hero.
“You don’t fade freight trains. You either jump on or step aside.”
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