Daily Brief - Monday, 7/14/25
Is NQ's Summer Vacation from Volatility About to End? All eyes are on the radar watching if a storm forms over the next two weeks.
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
Tuesday - 7/15/25
6:00am EST - Blackrock Q2 2025 Earnings
6:55am EST - JPMorgan Q2 2025 Earnings
7:00am EST - Wells Fargo Q2 2025 Earnings
8:00am EST - Citi Q2 2025 Earnings
8:30am EST - US CPI YoY (Expected: 2.6%)
8:30am EST - US CPI MoM (Expected: 0.3%)
8:30am EST - US Core CPI YoY (Expected: 2.9%)
8:30am EST - US Core CPI MoM (Expected: 0.3%)
Wednesday - 7/16/25
8:30am EST - US PPI YoY (Expected: 2.5%)
8:30am EST - US PPI MoM (Expected: 0.2%)
8:30am EST - US Core PPI YoY (Expected: 2.7%)
8:30am EST - US Core PPI MoM (Expected: 0.2%)
9:15am EST - US Industrial Production MoM (Expected: 0.1%)
Thursday - 7/17/25
8:30am EST - US Retail Sales MoM (Expected: 0.1%)
8:30am EST - US Initial Jobless Claims (Expected: 234k)
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 - Friday, 7/11/25
Session Stats
Open: 22,915.25
High: 23,021.50
Low: 22,863.00
Close: 22,955.25
Settlement: 22,959.00
Range: 158.50 points / 634 ticks
Volume: 461,738
Open Interest Change: +3,794 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,010.00
Point of Control (POC): 22,965.00
Value Area Low (VAL): 22,950.00
Prior Session Breakdown - Market Profile and NY Session
Friday's session was a Normal day, delivering a compelling demonstration of the market's underlying resilience, despite opening within the prior session's range and testing lower levels early in the day. The session developed into a normal day with a distinctive "P"-shaped profile, characterized by a prominent single-print buying tail extending from approximately 22,900 down to 22,863—a clear sign of aggressive rejection of lower prices by institutional buyers.
The opening auction began in balance near the bottom of Thursday's range and quickly tested below the prior session's low, reaching 22,863.00 before encountering fierce buying interest. This “toe dip” as I call it, signaled that participants wanted to test for business at lower prices off the open. Once this rejection happened, price never got near that level again in the session. This buying tail represents excess—a zone where price was quickly rejected and can provide support in the future. The swift recovery early, above the prior session's VAL demonstrated the market's commitment to higher fair value, despite the initial probe lower.
What made this session particularly noteworthy was the strong rejection by sellers well below the prior session's high, with resistance materializing around 23,015-23,020. The single Time Price Opportunity (TPO) at the session high suggests an unfinished auction, indicating that while buyers were aggressive on dips, sellers remain present at higher levels. The session's rotational character, combined with the late-day selloff into the close, reinforced the market's current state of balance within defined price levels.
The value area rotated lower with overlap from the previous session, reflecting the session's early weakness and subsequent recovery. The VAH dropped to 23,010.00 while the VAL settled at 22,950.00, creating a tighter value area that encompassed the session's primary areas of two-way trade. The POC at 22,965.00 positioned toward the bottom of the value area, confirming balanced conditions despite the early volatility.
The overlap with the prior session's value area suggests continuity in the market's perception of fair value, while the lower positioning reflects participants' cautious approach following the week's tariff-related headlines.
Volume & Participation
Total Volume: 461,738 – higher than the prior session but still below recent peaks, representing average participation for the last three weeks
Open Interest: +3,794 contracts (NQU5) – significant increase indicating substantial new business and likely long accumulation
Price Range: 158.50 points / 634 ticks – compressed range despite early volatility, typical of normal day structure
The substantial open interest increase tells a compelling story: as price pulled back during the session, participants viewed the weakness as an opportunity to add long positions. This "buying the dip" behavior aligns perfectly with the positive gamma environment and suggests institutional players remain committed to higher prices despite short-term headline noise.
Final Thoughts
Friday's session was a textbook example of how markets behave in positive gamma environments when faced with temporary weakness. The aggressive rejection of lower prices, evidenced by the prominent buying tail, combined with the significant open interest increase, confirms that institutional participants continue to view any meaningful pullbacks as accumulation opportunities.
The session's structure—with excess on the downside but an unfinished auction to the upside—suggests the market remains biased higher despite near-term consolidation. The late-day weakness into the close likely reflected end-of-week position adjustment rather than any fundamental shift in sentiment.
Today’s Analysis – Monday, 7/14/25
Market Context
At the time of this writing NQ is positioned to open this morning with modest bearish inventory, currently trading at 22,890.00, approximately 60 points below Friday's settlement. This places price very close to Friday's session low and could result in an out-of-balance opening to the downside depending on the final opening print. The overnight range between 22,903.75 and 22,804.25 has been contained but represents a continuation of the cautious sentiment that emerged late Friday.
We remain entrenched in a low volatility, positive gamma environment where dealer behavior continues to support meaningful dips. However, this week marks the beginning of a significantly more challenging calendar that could test the durability of this regime. With earnings season officially kicking off tomorrow, CPI data on Tuesday, and PPI on Wednesday, the market faces its first major test of volatility catalysts in weeks.
The current positioning suggests participants are approaching this loaded calendar with appropriate caution. The VIX has already begun to reflect this uncertainty, rising over 1.00 point since Friday as market participants position for potential regime changes. While the market has proven remarkably resilient to macro headlines thus far, the confluence of earnings and key inflation data represents a more substantial test of the positive gamma framework.
Bias & Mindset
Bias: Neutral
I'm adopting a neutral bias for today's session with low confidence, reflecting the transitional nature of the current environment. This week represents the start of a period that could fundamentally challenge the low volatility regime that has characterized recent trading. With earnings season beginning tomorrow alongside critical economic data, the market's response to today's positioning will be instructive.
The key consideration is whether participants will use any weakness as an accumulation opportunity—as they have consistently done recently—or if the approaching calendar will prompt more defensive positioning. Friday's significant open interest increase suggests buyers remain engaged, but the overnight weakness indicates some profit-taking or risk reduction ahead of the busy week.
Today's action could set the tone for how the market approaches the upcoming volatility catalysts, making it a critical session for gauging participant sentiment.
Today I will be attempting to gauge tempo and volatility off the open along with direction. As we see quite often, it usually takes an hour or two for NQ to show the true direction for the day as the initial move is often reversed. With low confidence in which direction the market is headed, I plan to be patient and look for trades today at the extremes of the range and VWAP. These are cheaper trades where I can quickly know if I’m wrong which eases stress and decision making. With a volatile news week ahead, it’s important for me today to ease into the week and preserve mental and financial capital for the potential opportunities ahead.
Key Levels I’m Watching Today
Upside:
23,020.00-23,010.00 — Area of consistent seller rejection from Friday's session
22,950.00 — Friday's VAL, break above would indicate potential return to fair value
22,900.00 — Current overnight high and key rebalancing level
Downside:
22,863.00 — Friday's session low, break below could indicate acceptance of lower prices
22,804.25 — Overnight low, trigger for potential range breakdown
22,785.00 — Area of sharp buyer rejection from Monday, July 7th session
Final Thoughts on Today
Today begins what promises to be the most challenging two-week period for the current market regime in quite some time. The confluence of earnings season launch, critical inflation data, and looming FOMC and tariff deadlines represents a perfect storm of potential volatility catalysts. While the market has demonstrated remarkable resilience to headline noise, the sheer volume of upcoming events could test even the most robust positive gamma framework.
The market's response to today's modest overnight weakness will be telling. If we see the familiar pattern of aggressive dip-buying and quick recovery, it would suggest participants remain confident in the underlying structure. However, if weakness persists or accelerates, it could signal a shift toward more defensive positioning ahead of the busy calendar. Watch for participation levels and the market's ability to hold above Friday's buying tail area—these will be key indicators of whether the recent resilience can withstand the approaching volatility test.
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