Daily Brief - Monday, 7/21/25
NQ Enters Post-OPEX Regime as Bulls Defend 23,100 Breakout Level
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
A fairly quiet and calm week ahead on the data release front as the market preps for FOMC next week on 7/30. Two of the Mag7 announce earnings this week with Google and Tesla on tap which will require watching as they can move the NQ.
Wednesday - 7/23/25
10:00am EST - Us Existing Home Sales (Expected: 4M)
4:00pm EST - Google Q2 2025 Earnings (Call @ 4:30pm EST)
4:05pm EST - Tesla Q2 2025 Earnings (Call @ 5:30pm EST)
4:10pm EST - IBM Q2 2025 Earnings (Call @ 5:00pm EST)
Thursday - 7/24/25
9:45am EST - US S&P Services PMI Flash (Expected: 52.9)
9:45am EST - US S&P Manufacturing PMI Flash (Expected: 52.4)
9:45am EST - US S&P Composite PMI Flash (Expected: —)
10:00am EST - US New Homes Sales (Expected: 0.65M)
4:00pm EST - Intel Q2 2025 Earnings (Call @ 5:00pm EST)
Friday - 7/25/25
8:30am EST - US Durable Goods (Expected: -10%)
Prior Session Analysis - Friday, 7/18/25
Session Stats
Open: 23,301.00
High: 23,310.00
Low: 23,169.50
Close: 23,226.50
Settlement: 23,224.50
Range: 140.50 points / 562 ticks
Volume: 451,427
Open Interest Change: -10,389 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,230.00
Point of Control (POC): 23,215.00
Value Area Low (VAL): 23,180.00
Prior Session Breakdown - Market Profile and NY Session
Friday's session delivered a sobering reminder that even the most convincing breakouts require time to digest their gains. What began as a promising gap opening at 23,301.00—building on Thursday's impressive trend day—quickly devolved into a listless session characterized by profit-taking and weekend position adjustment. The session developed into a normal day with a distinctive "b"-shaped profile, indicating balanced conditions despite the early gap.
The opening auction told the story of the entire session within the first 25 minutes. Price immediately sold off from the gap opening, dropping to the 23,190 area where it found support and remained for the duration of the session. This initial move represented the only price action with any real conviction, as the remainder of the session was marked by sideways chop and lack of directional commitment from either side.
What made this session particularly notable was what didn't happen. Despite the early selling pressure and the substantial profit-taking evidenced by the open interest decrease, price never challenged the critical 23,100 level that had defined the upper boundary of the previous range. This acceptance above the breakout level, even during a consolidation session, suggests the structural shift from Thursday's trend day remains intact.
The value area contracted compared to Thursday's session, with the VAH dropping to 23,230.00 and the POC settling at 23,215.00. Importantly, the VAL held steady at 23,180.00—the same level as Thursday's VAL and Tuesday's VAH from July 15th. This continuity in the value area low suggests this level has become a significant support zone that the market respects. This was further reinforced first hand in the price action on Friday, finding support in that area on multiple attempts to auction lower.
The POC's position at 23,215.00 indicates that most of the session's business was conducted in the middle-to-lower portion of the day's range, typical of distribution days where early gains are gradually unwound through the session.
Volume & Participation
Total Volume: 451,427 – slightly higher than Thursday's session but below the peaks from earlier in the week
Open Interest: -10,389 contracts (NQU5) – substantial decrease indicating significant long liquidation
Price Range: 140.50 points / 562 ticks – compressed range reflecting the session's consolidative character
The combination of modestly higher volume with a substantial open interest decrease tells a clear story: participants used Friday's session to reduce risk ahead of the weekend. The -10,389 contract reduction represents a significant portion of Thursday's massive +19,395 increase, suggesting that some of the institutional positioning from the breakout day was profit-taking rather than long-term accumulation.
Final Thoughts
Friday's session was a fairly typical post-breakout consolidation, characterized by profit-taking and position adjustment rather than any fundamental challenge to Thursday's bullish narrative. The session's most important achievement was maintaining acceptance above the 23,100 breakout level despite the early selling pressure and substantial position reduction. This type of consolidation is actually healthy after a major breakout.
While the open interest decrease suggests some of Thursday's positioning was short-term in nature, the market's ability to hold above key support levels during this consolidation phase is encouraging for the bulls. The limp character of the session—with only the initial 25-minute move showing any conviction—suggests participants were more focused on weekend risk management than making strong directional statements.
Today’s Analysis – Monday, 7/21/25
Market Context
The NQ is positioned for a balanced opening this morning, currently trading at 23,289.00, approximately 65 points above Friday's settlement. This represents a solid recovery from Friday's profit-taking session and places price near the top of Friday's range, suggesting the potential for an out-of-balance opening with a gap to the upside. The overnight range between 23,308.50 and 23,203.75 has been well-contained, indicating measured optimism rather than euphoric buying.
Today marks the beginning of a new regime following Friday's July OPEX expiration. This transition is particularly significant because the expired options were predominantly calls—a pattern we've seen in February, March, and May this year. Notably, each of those call-heavy OPEX events was followed by market pullbacks, though historical patterns don't guarantee repetition.
The current environment presents mixed signals. While we remain in a low volatility environment, the gamma positioning has shifted to mixed following the options expiration, and dealer behavior is similarly uncertain as the new positioning establishes itself. The market continues to exhibit high headline sensitivity, particularly important given that we're operating at price levels where perfection is priced in.
Bias & Mindset
Bias: Bullish
I'm maintaining a bullish bias with medium confidence, reinforced by Friday's session behavior despite the profit-taking pressure. The critical factor is that price held above the 23,100 breakout level for the entirety of Friday's session, even during substantial position liquidation. This acceptance above the key level suggests the structural shift from Thursday's breakout remains intact.
The overnight action, which has brought us near Friday's highs, supports the notion that any weakness continues to be viewed as an opportunity rather than the beginning of a reversal. However, the post-OPEX environment requires careful attention to how the new gamma regime develops, as this could influence the character of price action in the coming sessions.
It would be surprising to see price break below 23,100 today without a significant catalyst, given the level's importance and the market's demonstrated commitment to higher fair value.
Key Levels I’m Watching Today
Upside:
Above 23,310.00 — All-time high territory where traditional level-setting becomes difficult
23,310.00 — Friday's high, correlation with overnight high around 23,308.50
Downside:
23,230.00 — Friday's VAH, break inside with acceptance would indicate fair value similar to Friday
23,203.75 — Overnight low, key support level
23,180.00-23,169.50 — Friday's VAL and session low, critical support zone that would signal potential sentiment change
Final Thoughts on Today
Today's session will be important for establishing the character of the post-OPEX environment. We're entering a period where the gamma positioning is reforming, and the market's response to any tests of support will be telling about institutional commitment to the recent breakout levels.
The light data release schedule this week shifts focus to individual earnings results, particularly Google and Tesla on Wednesday, which will have direct impact on NQ's direction. Some positioning ahead of these results is likely.
For traders, the environment favors patience and selectivity. Long positions around the 23,100 area offer good risk/reward, while any longs at all-time highs represent more of a gambling mentality. The higher timeframe trend remains bullish, making long-bias strategies more favorable until clear signals emerge about the new gamma regime. For newer traders, staying aligned with the higher timeframe trend through long-only strategies remains the higher probability approach while we assess how the post-OPEX dynamics develop.
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