Daily Brief - Thursday, 7/10/25
NQ's Midlife Crisis Results in Wild Morning, Responsible Afternoon Rally
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
Thursday - 7/10/25
8:30 am EST - US Initial Jobless Claims (Expected: 240.5k)
8:30am EST - US Continued Jobless Claims (Expected: 1.962M)
Prior Session Analysis - Wednesday, 7/9/25
Session Stats
Open: 22,978.75
High: 23,112.00
Low: 22,919.75
Close: 23,051.00
Settlement: 23,052.75
Range: 192.25 points / 769 ticks
Volume: 450,903
Open Interest Change: +1,177 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,050.00
Point of Control (POC): 22,985.00
Value Area Low (VAL): 22,960.00
Prior Session Breakdown - Market Profile and NY Session
Wednesday's session was a textbook normal variation day that finally delivered the volatility the market had been waiting for, breaking the string of sleepy, balanced sessions that defined the prior week. A dramatic opening sequence saw price rocket from the 22,978.75 open to 23,112.00 within the first hour, only to reverse course and plunge past the opening price to find support at 22,930.00—the previous session's VAH.
The session's profile shape was a distorted "D" due to the parabolic price action in the first three time periods, but what happened after the initial volatility was perhaps more telling than the fireworks themselves. Price consolidated for three periods (D, E, F TPOs) around the 22,930 support zone before embarking on a disciplined, grinding auction higher that persisted through the close. This methodical recovery, combined with the session's strong finish in the upper portion of the range, painted a decidedly bullish picture.
Most importantly, the market's response to adversity—finding support exactly at the prior session's VAH and refusing to revisit lower levels—demonstrated the underlying strength that has characterized this market structure. The fact that price never returned to retest the 22,930 support area after moving away speaks volumes about the conviction of buyers stepping in at that level.
Value area parameters shifted higher, with VAH moving to 23,050.00 and VAL rising to 22,960.00, reflecting the session's upward bias despite the early volatility. The POC settled at 22,985.00, positioned in the lower third of the value area—a sign that while price spent time across a wide range, the bulk of the serious business was conducted in the lower portion of the day's range.
This value area migration higher, combined with the strong close, suggests the market has found comfort at these elevated levels and is prepared to build value in the 23,000+ zone.
Volume & Participation
Total Volume: 450,903 – higher than the prior session, reflecting the return of volatility and participant engagement
Open Interest: +1,177 contracts (NQU5) – continued incremental increases suggesting ongoing long accumulation
Price Range: 192.25 points / 769 ticks – expanded from recent compressed ranges, marking a potential regime shift but still in the lower end of a typical NQ range
The volume surge confirms that participants were eager to engage once volatility returned, while the persistent open interest growth suggests the increased activity represents genuine position building rather than just day trading noise. This combination often precedes sustained directional moves.
Final Thoughts
Wednesday's session was a masterclass in market resilience. The return of volatility provided the spark for more dynamic price action, but more importantly, the market's response to that volatility revealed the underlying bullish sentiment that had been building during the recent balanced sessions. The dramatic reversal from early weakness to strength, followed by the disciplined grind higher, suggests institutional players are firmly in accumulation mode.
The session broke the low-volatility regime that had dominated recent trading, potentially opening the door for more dynamic price action ahead. With value area now established in the 23,000+ zone and buyers clearly willing to step in on any meaningful dips, the market appears positioned for continued upward momentum.
Today’s Analysis – Thursday, 7/10/25
Market Context
The NQ is set to open this morning essentially flat, currently trading at 23,046.00, just 6 points below yesterday's settlement. This stable overnight action following yesterday's roller coaster session suggests the market has found equilibrium at these higher levels and is comfortable building value in the 23,000+ zone. The overnight range has been remarkably tight, indicating no significant overnight developments to alter the bullish sentiment established during yesterday's strong recovery.
We remain in a low volatility, positive gamma environment, but yesterday's session demonstrated that this regime can still accommodate meaningful price movements when volatility naturally emerges. The dealer behavior of buying dips was on full display during yesterday's dramatic reversal from the 22,930 support level, and this pattern appears likely to persist. The market's ability to absorb the early volatility and finish strong suggests the underlying structural support remains intact.
Yesterday's return of volatility may have marked a subtle shift in the market's character, potentially setting the stage for more dynamic sessions ahead. With earnings season beginning next week and July OPEX approaching on Friday, the stage is set for increased activity. The key remains that institutional inventory continues to grow, as evidenced by the persistent open interest increases, and any meaningful pullbacks are likely to attract buyers.
Bias & Mindset
Bias: Bullish
I'm maintaining a bullish bias heading into today's session, with increased confidence following yesterday's impressive display of resilience. The market's ability to recover from early weakness and grind higher throughout the day, combined with the strong close in the upper portion of the range, reinforces the upward trajectory that has been building over recent sessions.
Yesterday's session was particularly encouraging because it demonstrated that even when volatility returns and tests the market's resolve, buyers remain committed and aggressive. The disciplined auction higher following the early morning drama suggests institutional participation is increasing, which typically precedes sustained directional moves. In this positive gamma environment, dips continue to be bought, and yesterday's price action provides a perfect example of this dynamic in action.
Key Levels I’m Watching Today
Upside:
23,112.00 — Yesterday's high, a break above opens the door for further upside price exploration
23,100.00 — Area of resistance during yesterday's opening auction, key level to reclaim
23,065.00 — Overnight high, range breakout trigger to the upside
23,050.00 — Yesterday's VAH, holding above suggests fair value remains elevated
Downside:
22,976.00 — Overnight low, range breakout trigger to the downside
22,960.00 — Yesterday's VAL, break below could indicate fair value moving lower
22,930.00 — Critical support from yesterday's reversal, never retested after initial bounce
22,919.75 — Yesterday's low, significant support level in any meaningful pullback
Final Thoughts on Today
Yesterday's session marked a potential turning point in what had been a persistently low-volatility environment. The market's response to the return of volatility—finding support exactly where it should and mounting a sustained recovery—suggests the underlying bullish structure remains not only intact but strengthening. The fact that price never returned to retest the 22,930 support level after bouncing speaks to the conviction of institutional buyers.
With earnings season approaching next week and July OPEX on Friday, we may be entering a period of increased activity and volatility. However, in this positive gamma regime, any weakness should continue to attract buyers until proven otherwise. The market has demonstrated its willingness to buy dips aggressively, and yesterday's price action provides a perfect template for how this dynamic is likely to play out in future sessions. Stay alert for momentum if we can break above yesterday's highs, but remain patient if we settle back into range-bound behavior.
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