Daily Brief - Friday, 7/11/25
NQ's Range-Bound Romance Hits a Snag; Will Tariff News Crash the Party?
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News Docket
No data releases today.
Prior Session Analysis - Thursday, 7/10/25
Session Stats
Open: 23,072.25
High: 23,090.00
Low: 22,901.25
Close: 23,015.00
Settlement: 23,013.25
Range: 188.75 points / 755 ticks
Volume: 392,049
Open Interest Change: -851 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,050.00
Point of Control (POC): 22,995.00
Value Area Low (VAL): 22,980.00
Prior Session Breakdown - Market Profile and NY Session
Thursday's session was a Normal day, price never left the IB and delivered rotational balance within a defined range, as the market demonstrated its commitment to the 23,100-22,900 range that has governed recent price action. The session opened at 23,072.25 and immediately faced aggressive selling pressure, with price auctioning down for the first 30 minutes to find support in the critical 22,900-22,919.75 zone—the same area of Wednesday’s session’s low on 7/9.
What made this session particularly revealing was the market's interpretation of Wednesday's strength. Rather than building on the previous day's recovery, participants chose to reject the upper portion of the established range, treating the move toward 23,100 as an overextension rather than a breakout attempt. I was wrong in my analysis that price would accept and start to build value above 23,000. The subsequent V-shaped recovery from the morning lows reinforced the range-bound character that has defined this market structure, with price closing back in the middle of the range—a classic sign of balance and two-way trade.
The profile remained entirely within the initial balance, creating a clean "D" shape that confirmed the rotational nature of the session. Notably, the session ended with a late-day spike lower right at 3:50 PM, suggesting some end-of-week position adjustment but nothing that materially altered the day's balanced structure.
Value area parameters showed subtle but important shifts that highlight the market's current state of equilibrium. The VAH held steady at 23,050.00—matching Wednesday's level—while the VAL tightened to 22,980.00, creating a more compressed value area that reflects the session's rotational character. The POC settled at 22,995.00, positioned in the lower third of the value area, indicating that while price explored the full range, the majority of business was conducted in the lower portion.
This value area contraction, combined with the unchanged VAH, suggests the market is becoming increasingly comfortable with current pricing levels while showing a slight bias toward the lower end of the range. The consistency in the VAH across multiple sessions indicates strong agreement about the upper end of fair value in the 23,050 area.
Volume & Participation
Total Volume: 392,049 – notably low for NQ, with anything below 400k representing diminished participation
Open Interest: -851 contracts (NQU5) – modest but notable decrease suggesting some position unwinding
Price Range: 188.75 points / 755 ticks – below average range in line with the rotational character, but still indicating healthy two-way trade
The combination of low volume and meaningful price movement reveals an important dynamic: the large move down off the open occurred without significant volume, and the negligible open interest loss suggests this wasn't a major liquidation event. Instead, it appears to represent normal range-bound rotation with some modest long liquidation, but not enough to alter the overall bullish inventory that market participants maintain.
Final Thoughts
Thursday's session offered traders setup opportunities in momentum and range-bound trading, with the market demonstrating both its respect for established boundaries and its commitment to two-way price discovery. The rejection of Wednesday's highs and the subsequent recovery from range lows confirmed that we're operating within a well-defined 23,100-22,900 framework. The longer price remains within this range, the more significant the eventual breakout is likely to be.
The session's rotational character, combined with the low volume and minimal open interest change, suggests the market remains in a consolidation phase rather than a directional trending mode. The late-day weakness may have been related to end-of-week positioning, but the overall structure remains intact and balanced.
Today’s Analysis – Friday, 7/11/25
Market Context
At the time of this writing NQ is set to open lower this morning, currently trading at 22,890.00, approximately 125 points below yesterday's settlement. This represents a potential out-of-balance open to the downside, with overnight action breaking below the established 23,100-22,900 range that has contained recent price action. The overnight range has been contained between 23,048.50 (matching yesterday's VAH) on the high side and 22,831.50 on the low side.
The catalyst for this weakness appears to be overnight news regarding EU and Canadian tariff developments, which has prompted participants to pare back risk heading into the weekend. This represents the first meaningful test of the range structure that has governed recent sessions, and the market's response will be critical in determining whether we're seeing a temporary excursion or a more significant regime shift.
We remain in a low volatility, positive gamma environment where dealer behavior typically supports meaningful dips. However, the overnight gap below the established range introduces a new dynamic that will test the resilience of this regime. The market has proven consistently resistant to sustained downward pressure, but today's price action will provide important information about the conviction of institutional buyers when faced with headline-driven weakness.
Bias & Mindset
Bias: Neutral → Bearish
I'm adopting a neutral-to-bearish bias for today's session, with low confidence given the conflicting dynamics at play. While the overnight tariff news has clearly shifted sentiment and created the first meaningful test of the established range, the market's recent bullish resilience suggests caution before assuming a major directional shift is underway.
The key will be watching for confirmation that price can accept below the 22,900 range low. Given the market's recent character, it wouldn't be surprising to see participants attempt to rebalance price back into the established range off the open. However, the magnitude of the overnight move and the headline risk suggests that fair value may indeed be perceived as lower than recent sessions.
Today being Friday adds another layer of complexity, as some participants will be reluctant to carry positions into the weekend given the uncertainty around additional tariff developments.
Key Levels I’m Watching Today
Upside:
23,100.00 — Consistent area of resistance over three sessions, now key rebalancing target
23,050.00 — Consistent VAH for the last two sessions, solid resistance level
22,980.00 — Yesterday's VAL, a move above would indicate fair value returning to previous levels
22,901.25 — Yesterday's low and range support, key rebalancing level
Downside:
22,860.00 — Consistent area of support from earlier this week's sessions
22,831.50 — Current overnight low, break below would confirm range breakdown
22,780.00 — Significant reversal level from Monday's session and prior session low
Final Thoughts on Today
Today represents the first significant test of the positive gamma regime and range structure that has characterized recent trading. The overnight tariff news has created conditions for potential long liquidation and a meaningful test of institutional conviction. The market's response to this out-of-balance opening will be critical—either we see the typical dip-buying behavior that has supported recent sessions, or we witness the beginning of a more significant correction.
The fact that we're opening below the established range for the first time in several sessions makes this a high-information day. Watch for early price acceptance below 22,900, which would suggest a range breakdown, or alternatively, look for aggressive buying to emerge that attempts to rebalance price back into the established parameters. Given the end-of-week dynamics and headline uncertainty, volatility could remain elevated, making this potentially the most important session for determining near-term direction.
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