Daily Brief - Thursday, 7/17/25
Powell Firing Rumors vs. Reality: NQ Gets Whacked by Headlines
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 - 7/17/25
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 - Wednesday, 7/16/25
Session Stats
Open: 23,074.25
High: 23,100.00
Low: 22,835.50
Close: 23,074.50
Settlement: 23,076.50
Range: 264.50 points / 1,058 ticks
Volume: 549,230
Open Interest Change: -2,291 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,070.00
Point of Control (POC): 22,965.00
Value Area Low (VAL): 22,960.00
Prior Session Breakdown - Market Profile and NY Session
Wednesday was a Neutral day and delivered a textbook example of headline-driven volatility, with the market spending the entire session reacting to political developments rather than following technical patterns. We've been closely monitoring the 23,100 level as a key resistance point, and yesterday the market actually reached exactly that level—making it the high of the day—before political headlines derailed any breakout attempt.
The market opened fairly calm at 23,074, just slightly above where we thought it might find support. But then news broke that Trump was meeting with lawmakers about potentially firing Fed Chair Powell, and shortly after, White House advisors started leaking that Powell might actually get the boot. The market hated this news and sold off hard, dropping all the way down to 22,835.
But here's the crazy part—Trump himself came out and said those rumors weren't true. Just like that, the market started climbing back up and spent the rest of the day slowly recovering. By the close, we were right back where we started at 23,074. It was like watching a really expensive ping-pong match.
When I analyze yesterday's Market Profile, something unusual stands out. The Point of Control—where the heaviest trading volume occurred—was positioned at the very bottom of the value area at 22,965. This configuration is atypical and suggests a really important fact that’s easily missed; most of the institutional activity was concentrated during the downward move rather than the recovery.
The good news is that when the market hit that 22,835 low, it got rejected hard. In Market Profile terms, we call this "excess"—it's like the market saying "nope, we're not supposed to be down here" and bouncing back quickly. This suggests that level might be off-limits for a while.
Volume & Participation
Total Volume: 549,230 – highest since June 23rd, reflecting heightened institutional activity
Open Interest: -2,291 contracts (NQU5) – continued outflow indicating ongoing long liquidation
Price Range: 264.50 points / 1,058 ticks – significantly expanded range reflecting the day's volatility
Yesterday's volume reached the highest levels since June 23rd, indicating significant institutional engagement. However, the concerning aspect is the second consecutive day of declining open interest, with over 2,000 contracts exiting the market. This combination of elevated volume and decreasing open interest typically signals risk reduction among large participants rather than aggressive positioning.
Final Thoughts
Yesterday demonstrated why traders must remain vigilant around major news events. The market's 200+ point intraday range, driven entirely by headlines, rendered traditional technical analysis secondary to fundamental developments. The session's ultimate return to near-opening levels after such volatility reflects the current state of market uncertainty.
Today’s Analysis – Thursday, 7/17/25
Market Context
Good news—the overnight session was much calmer than yesterday's drama. We're currently trading at 23,075, just 2 points below where we closed yesterday. The overnight range stayed between 23,151 and 23,017, and importantly, we've held above that psychological 23,000 level that tends to be significant for the NASDAQ.
The current environment presents several ongoing challenges that extend well beyond the immediate calendar:
August 1st Tariff Deadline: Unlike previous instances where deadlines were extended, White House advisors indicate no further delays are planned. This represents a more definitive timeline than the market has previously navigated.
Fed Chair Powell Uncertainty: Market sensitivity to Powell-related headlines has been pronounced, with sharp selloffs occurring on firing rumors regardless of their ultimate validity.
Elevated Political Risk: The current political landscape suggests that headline-driven volatility will likely persist as a structural feature of the market environment, rather than a temporary condition.
Bias & Mindset
Bias: Neutral → Bearish
My bias remains neutral to bearish with low confidence, based on the recent pattern of elevated volume accompanied by institutional position reduction. The combination of these factors suggests a defensive posture among sophisticated participants ahead of upcoming catalysts.
For traders, this environment requires heightened risk management. When headline-driven moves can generate 200+ point ranges within minutes, traditional stop-loss strategies may prove insufficient, necessitating more conservative position sizing and enhanced vigilance of trade positions.
Key Levels I’m Watching Today
Upside:
23,222 — That's our all-time high from Tuesday
23,151 — Overnight high from last night
23,100 — This has been our key resistance level for weeks now
Downside:
23,070 — Yesterday's value area high
23,017 — Last night's low
22,960 — Yesterday's value area low
22,835 — Yesterday's low where we saw that strong bounce
Final Thoughts on Today
The coming session will likely be characterized by continued headline sensitivity rather than technical pattern recognition. We're operating in an environment where fundamental developments override technical structure, and institutional participants are clearly adopting more defensive positioning as evidenced by the open interest outflows.
Any developments regarding Powell's position as Fed Chairman warrant particular attention. The market has demonstrated clear sensitivity to these headlines, and with Powell indicating he will not resign voluntarily, potential legal challenges could introduce extended periods of uncertainty. This uncertainty would bring in enough volatility that it would upset the current positive gamma regime and potentially flip it on its head.
This trading environment favors patience and selectivity over aggressive positioning. The technical patterns will return to prominence once the current fundamental uncertainties clear, but that clarity may take considerable time to emerge given the current political landscape.
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