Daily Brief - Monday, 4/7/25
I go on vacation and all it took was my out-of-office reply to trigger a full-blown meltdown in the markets. That's my bad.
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.
Upcoming News
Wednesday - 4/9/25
New US Tariffs go into effect.
2:00pm EST - FOMC Meeting Minutes
Thursday - 4/10/25
China's retaliatory tariffs of 34% on U.S. goods take effect.
8:30am EST - US Initial Jobless Claims (Expected: 223k)
8:30am EST - US CPI YoY (Expected: 2.6%)
8:30am EST - US CPI MoM (Expected: 0.1%)
8:30am EST - US Core CPI YoY (Expected: 3%)
8:30am EST - US Core CPI MoM (Expected: 0.3%)
Friday - 4/11/25
Earnings reports from major financial institutions, including JPMorgan Chase, Wells Fargo, and BlackRock, marking the start of the first-quarter earnings season.
8:30am EST - US PPI YoY (Expected: 3.3%)
8:30am EST - US PPI MoM (Expected: 0.2%)
8:30am EST - US Core PPI YoY (Expected: 3.6%)
8:30am EST - US Core PPI MoM (Expected: 0.3%)
10:00am EST - University of Michigan Sentiment Prelim (Expected: 54)
Prior Session Stats and Analysis - Friday, 4/4/25
Session Open: 18,154.50
Session High: 18,248.75
Session VAH: 18,000.00
Session POC: 17,825.00
Session VAL: 17,650.75
Session Low: 17,443.50
Session Close: 17,534.75
Session Settlement: 17,539.00
Session Range: 805.25 pts, 3221 ticks
OI Change (Prelim): +17,965 (NQ)
Est Volume: 1,203,009
Context from the Market Profile
Zooming out, the Market Profile gives us a broader view of structure:
Notice the steady grind lower, interrupted only briefly by minor pullbacks.
Price tested the 18,000 psychological level earlier in the week, but Friday’s breakdown suggests that area now acts as firm resistance.
The late-session flush into the close sealed the directional bias: bears in charge, with weak demand showing up near the lows.
Chart Breakdown – 5-Minute View
A few key observations from the session:
Sellers Dominated: The session was characterized by a steady march of lower highs and lower lows, a textbook signal of seller control.
Temporary Buyer Push (11:00–11:30am ET): Buyers made a brief attempt to push price higher, managing to drive it back into the Opening Range and even above VWAP. However, that move quickly faded — likely due to either macro news flow or simply overwhelming selling pressure. Once buyers gave up, there were no credible attempts to regain control.
VWAP As a Sell Zone: From 12:00pm onward, VWAP (Volume Weighted Average Price) acted as a dynamic resistance level. Each time price revisited this area, sellers stepped back in — offering several high-probability short setups for traders who were aligned with the trend.
Volume & Participation
+17,965 contracts added in open interest — a strong sign of new business participation, not just short-term intraday trading.
1.2 million contracts traded, much higher than the previous session — this wasn't just a drift lower on low volume.
Nearly an 800-point range, which is large. But remember — size doesn’t always equal ease of trading.
Final Thoughts: Not As Easy As It Looked
Looking at the higher timeframe, it might seem like Friday was a “close-your-eyes-and-short” kind of day — and in hindsight, it was.
But on the lower timeframe, the story was more nuanced. Price repeatedly pulled back to VWAP, shaking out impatient shorts before continuing lower. If your entries weren’t precise and patient, it was easy to get chopped out before the move.
Pre-Market Plan – April 7th
As of this writing, overnight inventory is heavily short, with NQ trading 500+ points below Friday’s settlement. This sets us up for an out-of-balance open and a significant gap to the downside.
Bias & Mindset
I’m heading into today with a bearish bias — until proven otherwise. NQ is down almost -13% since Friday, 3/28. But let’s be real: when the market drops this far, this fast, and volatility is this elevated, things don’t move in straight lines. Expect whipsaws, reversals, and fakeouts.
In this kind of environment, patience is more important than aggression.
Stick with the trend, be selective with entries, and don’t chase breakdowns.
One emotional misstep and you can get run over fast by a sudden reversal.
A Word of Caution
You don’t have to trade this environment. Sitting in cash is a position — and sometimes, it's the best one.
This kind of environment can trigger FOMO or greed, especially when headlines are loud and candles are long. But here’s a rule of thumb that’s always served me well:
The higher the VIX, the more experience it takes to trade effectively.
Volatility expands opportunity, yes — but it also amplifies risk. If you’re newer to the game or feeling rattled, this may be a time to observe, not engage.
What About Levels?
I’m not providing key levels today — and that’s intentional.
With the VIX near 50, the market is being driven by emotion and headlines, not structure. Levels that normally offer reliable reactions may not matter today.
I’d rather offer no levels than post ones I don’t believe will hold.
This is a sentiment-driven market. Trade accordingly.
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