Daily Brief - Friday, 8/1/25
From 24K Dreams to 23K Reality: Tariff Deadline Delivers Brutal Wake-Up Call
Disclaimer
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News Docket
Friday - 8/1/25
US Tariffs Start Deadline
8:30am EST - US Average Earnings YoY (Expected: 3.8%)
8:30am EST - US Nonfarm Payrolls (Expected: 107k)
8:30am EST - US Unemployment Rate (Expected: 4.2%)
9:45am EST - US S&P Manufacturing PMI Final (Expected: 49.5)
10:00am EST - US ISM Manufacturing PMI (Expected: 49.5)
10:00am EST - University Michigan Sentiment Final (Expected: 61.9)
Prior Session Analysis - Thursday, 7/31/25
Session Stats
Open: 23,747.25
High: 23,752.00
Low: 23,300.00
Close: 23,354.25
Settlement: 23,365.00
Range: 452.00 points / 1,808 ticks
Volume: 741,046
Open Interest Change: -2,699 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,680.00
Point of Control (POC): 23,575.00
Value Area Low (VAL): 23,400.00
Prior Session Breakdown - Market Profile and NY Session
Well, that escalated quickly—in the wrong direction. Thursday was a brutal reminder that what goes up in this business can come down just as fast, and sometimes faster. We opened with that massive gap higher at 23,747, riding the wave from Wednesday's earnings euphoria, and within five minutes the entire gap was closed and sellers took complete control.
This was the first genuine trend day we've seen in a while, and unfortunately for the bulls, it was trending in the wrong direction. The session developed into a classic downward trending profile that almost looked like a double distribution, with sellers aggressively driving price lower for the first two hours straight down to the 23,500 area.
Around 11:20 AM, buyers tried to mount a comeback, managing to auction price back up to VWAP around 23,615. But that rally had all the staying power of a house of cards—sellers immediately stepped back in and drove price even lower, taking out the prior session's low and reaching all the way down to just above 23,300. There was a brief attempt to recover to the 23,450 area (which happened to be Wednesday's VAL), but sellers weren't having any of it and drove price right back down into the close.
What made this session particularly concerning was the one-sided nature of the selling. This wasn't balanced two-way trade or normal profit-taking—this looked like a run for the exits by some higher timeframe participants. The range engulfed the prior four sessions' ranges, which tells you everything you need to know about the intensity of the move.
The value area widened dramatically, running from 23,400 to 23,680 and straddling Wednesday's tight range. This massive expansion reflected the significant increase in trade facilitation as participants worked through this dramatic repricing. Oddly enough, the POC actually moved higher to 23,575, which shows that despite the selling pressure, there was still meaningful business being done in the upper portion of the range during the morning recovery attempt.
The widening value area suggests real price discovery was happening rather than just panic selling, though the ultimate direction of that discovery wasn't what the bulls wanted to see.
Volume & Participation
Total Volume: 741,046 – highest volume since May, confirming this was a significant institutional event
Open Interest: -2,699 contracts (NQU5) – moderate outflow suggesting some position unwinding
Price Range: 452.00 points / 1,808 ticks – twice the normal NQ range reflecting the trending nature of the session
The volume explosion tells the whole story—when you get the highest volume in months on a down day, institutions are making serious moves. The open interest decrease wasn't massive, but it was enough outflow to be meaningful, and the key will be watching whether this continues.
Final Thoughts
Thursday was a sobering reminder that the tariff deadline isn't just background noise—it's a real catalyst that can move markets in a big way. The mixed earnings from Apple and Amazon didn't help, but the underlying theme was clear: maybe the market was a bit too optimistic about Trump pushing back that August 1st deadline.
Jamie Dimon and others had been warning for months that the market was overestimating the chances of another delay, and it looks like they might have been right. What we saw Thursday could be the beginning of a rebalancing of expectations, and that's rarely a smooth process.
Today’s Analysis – Friday, 8/1/25
Market Context
Holy moly, what a difference 24 hours makes. The NQ is set to open at 23,063, a staggering 302 points below yesterday's settlement, which puts us in serious out-of-balance territory to the downside. The overnight range between 23,347.50 and 23,031.50 shows continued selling pressure, and we're now sitting just above some really critical support levels.
Here's the kicker—at yesterday's open, we were flirting with 24,000, and now we're sniffing 23,000. That's an 800+ point swing in less than 24 hours, which is absolutely bonkers even by this market's standards.
The VIX has surged almost 4 points (27%) since 3 AM yesterday, which tells you everything you need to know about the fear that's suddenly gripped this market. The tariff deadline that everyone knew was coming apparently caught a lot of people off guard when Trump actually meant it this time.
And just to add more fuel to the fire, we've got a complete data dump this morning. At 8:30 AM, we get the trifecta of jobs data—nonfarm payrolls (expected 107k), unemployment rate (expected 4.2%), and average earnings growth (expected 3.8%). Then at 9:45 AM, we have S&P Manufacturing PMI, followed by ISM Manufacturing PMI and University of Michigan sentiment at 10:00 AM. It's like someone decided that a market already on edge needed a few more potential catalysts thrown at it.
We're starting to see some real changes in the market's structure. The gamma positioning is shifting from positive to mixed, and I'm not assuming dips will be bought automatically anymore. This regime could flip pretty quickly if the selling continues, and we need to be ready for that possibility.
Bias & Mindset
Longer Term Bias: Neutral
Today’s Bias: Neutral
I'm staying neutral with low confidence because honestly, I have no idea where this thing settles. What a complete turn of events in 24 hours. Yesterday morning we were debating whether 24,000 was within reach, and now we're back down testing levels we haven't seen since mid-July.
The market was apparently overestimating Trump's willingness to push back the tariff deadline again, and now we're seeing what happens when that assumption gets proven wrong. Wall Street veterans like Jamie Dimon had been warning about this for months, but the market kept betting on another delay that never came.
The overnight action found support right near the top of that range we were stuck in from July 3-16, which is interesting from a technical perspective. But this is more than just a healthy pullback in the uptrend now—we're testing whether this whole rally since mid-July was built on shaky assumptions.
Key Levels I’m Watching Today
Upside:
23,400 — Getting back into yesterday's value area would provide some relief
23,347 — Overnight high that got swiftly rejected, reclaiming this would be encouraging
23,300 — Yesterday's low, retaking this would be a good sign for the bulls
Downside:
23,100 — This is the big one. Break below here and we're back in that July range, and the higher timeframe uptrend is in serious question
23,000 — Psychological level that seemed impossible yesterday but is now within striking distance
22,800 — Bottom of that July range. If we get here, all warning lights are flashing
Final Thoughts on Today
Today's open is going to be absolutely critical. If price auctions down below 23,100 and finds acceptance there, we might be looking at significantly lower prices and the invalidation of the entire uptrend. But if we can recover and auction back up, that would suggest this market still has support from higher timeframe participants and yesterday's bloodbath was temporary.
I'll be watching options flow and gamma positioning like a hawk today. If we see a regime change to negative gamma and those call/put walls start getting breached, this could get ugly pretty fast. The positive gamma environment that's been supporting this market for weeks might be ending, and that changes everything about how we should expect price to behave.
The combination of the tariff deadline and this morning's data barrage creates a perfect storm scenario. Jobs numbers, manufacturing data, and sentiment readings all have the potential to either stabilize this market or send it into another tailspin. The market will be hypersensitive to any news throughout the day, particularly if the jobs data comes in weaker than expected on top of everything else.
What looked like unstoppable momentum just 48 hours ago now looks like it might have been built on quicksand. Sometimes the market has a funny way of reminding you that nothing goes up forever, and assumptions about political outcomes can be very expensive when they're wrong.
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