Daily Brief - Friday, 7/18/25
Decisive Trend Day Ends Range-Bound Frustration as Bulls Reclaim Control
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.
News Docket
Friday - 7/18/25
July OPEX
8:30am EST - US Housing Starts (Expected: 1.298M)
10:00am EST - University Michigan Sentiment Prelim (Expected: 61.5)
Prior Session Analysis - Thursday, 7/17/25
Session Stats
Open: 23,100.25
High: 23,279.75
Low: 23,065.75
Close: 23,257.75
Settlement: 23,251.00
Range: 214.00 points / 856 ticks
Volume: 446,103
Open Interest Change: +19,395 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,278.00
Point of Control (POC): 23,255.00
Value Area Low (VAL): 23,180.00
Prior Session Breakdown - Market Profile and NY Session
Thursday delivered exactly what we've been waiting for—a decisive trend day that finally broke the market out of its prolonged consolidation. The session opened precisely at the prior session's high of 23,100 and immediately showed how trending markets should behave. After a brief test of the previous session's VAH around 23,070, buyers stepped in with conviction and never looked back.
The market's response to that initial test was telling. Rather than the choppy, headline-driven action we've endured recently, price launched into a sustained 200-point auction higher that continued until 12:30 PM. This move accomplished something critically important—it broke out of the higher timeframe range between 23,100 and 22,830 that had contained the market for ten trading sessions. More importantly, price didn't just break out; it found acceptance above this key level and established new value in the 23,200+ zone.
The session's character was unmistakably trending, with a "P"-shaped profile that showed clear upside range extension. After the initial breakout, price settled into a tight 40-point range between approximately 23,280 and 23,240 for the remainder of the session. This type of controlled consolidation at new highs is exactly what you want to see in a healthy uptrend—it suggests accumulation rather than distribution.
The value area migrated decisively higher, with the VAH reaching 23,278.00 and the POC settling at 23,255.00—both positioned in the upper portion of the new range. The VAL at 23,180.00 established a new floor that represents a significant migration from recent sessions. This value area positioning confirms that participants are comfortable conducting business at these elevated levels.
The POC's position at 23,255.00 is particularly significant, as it represents the area where the heaviest volume occurred during the trending phase. This high-volume node at 23,255 became a focal point for the session and is likely to serve as important support in future sessions.
Volume & Participation
Total Volume: 446,103 – lower than recent sessions but appropriate for a trending day
Open Interest: +19,395 contracts (NQU5) – massive increase indicating substantial new long positioning
Price Range: 214.00 points / 856 ticks – healthy range reflecting the trending character
The standout story is the dramatic reversal in open interest. After two consecutive sessions of institutional position reduction, we saw nearly 20,000 contracts of new business enter the market. This represents one of the largest single-day increases in recent months and suggests that institutions used the recent weakness as an opportunity to build significant long positions.
The combination of trending price action and massive open interest growth is exactly what you want to see in a legitimate breakout. This type of institutional commitment typically precedes sustained directional moves.
Final Thoughts
Thursday's session was a reminder of why we endure the choppy, frustrating periods—they often precede the trending days where significant profits are made. The market's ability to break out of the ten-session range with such authority, combined with the massive institutional positioning evidenced by the open interest increase, suggests this breakout has legs.
Days like this are when traders make the bulk of their profits. The key is recognizing when the market shifts from range-bound to trending behavior and positioning accordingly. Yesterday's decisive action above 23,100 with strong acceptance represents a clear regime change that should be respected.
Today’s Analysis – Friday, 7/18/25
Market Context
NQ is positioned for a balanced opening this morning, currently trading at 23,260.00, just 9 points above yesterday's settlement. The overnight range between 23,309.50 and 23,245.25 has remained relatively contained, suggesting the market is consolidating yesterday's impressive gains rather than extending them immediately. The fact that overnight action has held comfortably above the 23,180 VAL from yesterday's session indicates continued acceptance of the new higher fair value.
We appear to be operating in a regime where the positive gamma environment continues to support dips, but with an important shift—the market has demonstrated its ability to trend decisively when conditions align. Yesterday's session proved that beneath the recent headline-driven choppiness, institutional appetite for long exposure remains robust.
Today brings July OPEX, which typically introduces some volatility as options expire and positions are adjusted. However, the timing comes after a decisive breakout session that saw nearly 20,000 contracts of new long positioning, suggesting the institutional commitment to higher prices remains strong.
Bias & Mindset
Bias: Bullish
Today I have a bullish bias with low confidence, I have been terrible with my recent directional predictions but I also recognize the clear signals from yesterday's session. The combination of the decisive breakout above 23,100, the massive open interest increase, and the market's ability to find acceptance at higher levels suggests the path of least resistance has shifted upward.
Yesterday's session was a statement by bulls that they are in control of this market. The move wasn't just a breakout—it was a decisive rejection of the range-bound behavior that had characterized recent sessions. When you see this type of institutional commitment evidenced by nearly 20,000 contracts of new positioning, it typically signals the beginning of a more sustained directional move.
The key will be watching whether the market can maintain this new higher fair value during today's OPEX-related volatility or if we see any attempt to retest the breakout level.
Key Levels I’m Watching Today
Upside:
23,309.50 — Overnight high, break above could signal continuation
23,279.75 — Yesterday's high and key resistance level
23,255.00 — High volume node from yesterday's session
Downside:
23,245.25 — Overnight low, key support level
23,180.00 — Yesterday's VAL, important support for new fair value
23,065.75 — Yesterday's low, break below would question the breakout
Final Thoughts on Today
Today's session will be important for confirming whether yesterday's breakout represents a genuine shift in market structure or merely another false start. The massive open interest increase suggests institutional conviction, while the overnight action's ability to hold above key support levels indicates continued acceptance of higher fair value.
July OPEX may introduce some volatility, but the underlying trend structure appears to have shifted decidedly bullish. The market has moved through the bulk of this week's data releases and events, positioning it well for continued upward momentum if the institutional commitment evidenced yesterday remains intact.
The trading environment now favors going with the higher timeframe trend on intraday trades. Dips will likely continue to be bought, making fading strategies lower probability. The better approach is waiting for pullbacks and entering long positions in alignment with the newly established uptrend. After ten sessions of range-bound frustration, the market has finally chosen a direction—and that direction appears to be up.
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