Daily Brief - Thursday, 7/31/25
FOMC Tried to Crash the Party, Meta & Microsoft Said "Hold My Beer"
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 - 7/31/25
8:30am EST - US PCE Price Index YoY(Expected: 2.5%)
8:30am EST - US PCE Price Index MoM (Expected: 0.3%)
8:30am EST - US Initial Jobless Claims (Expected: 223.5k)
8:30am EST - US Core PCE Price Index YoY (Expected: 2.7%)
8:30am EST - US Core PCE Price Index MoM (Expected: 0.3%)
8:30am EST - US Consumer Spending MoM (Expected: 0.4%)
9:45am EST - US Chicago PMI (Expected: 42)
4:00pm EST - Amazon Q2 2025 Earnings (Call @ 5:00pm)
4:00pm EST - Apple Q3 2025 Earnings (Call @ 5:00pm)
Friday - 8/1/25
US Tariffs Start Deadline
8:30am EST - US Average Earnings YoY (Expected: 3.8%)
8:30am EST - US Nonfarm Payrolls (Expected: 107k)
8:30am EST - US Unemployment Rate (Expected: 4.2%)
9:45am EST - US S&P Manufacturing PMI Final (Expected: 49.5)
10:00am EST - US ISM Manufacturing PMI (Expected: 49.5)
10:00am EST - University Michigan Sentiment Final (Expected: 61.9)
Prior Session Analysis - Wednesday, 7/30/25
Session Stats
Open: 23,487.00
High: 23,689.00
Low: 23,356.50
Close: 23,484.00
Settlement: 23,480.50
Range: 332.50 points / 1,330 ticks
Volume: 539,676
Open Interest Change: +3,501 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,560.00
Point of Control (POC): 23,525.00
Value Area Low (VAL): 23,450.00
Prior Session Breakdown - Market Profile and NY Session
Holy rollercoaster, Wednesday was a day that had everything. If you missed it, you missed one of those sessions that traders talk about for a long time. The session started innocently enough with some choppy, indecisive action around the prior day's value area, but by the close, we had witnessed a 232-point drop in 30 minutes followed by a 300-point rocket ship that took us to new all-time highs. Just another Wednesday, right?
The morning was actually pretty tame—price opened right in the middle of Tuesday's value area and spent most of the time testing the VAH around 23,560. It was the kind of grinding action that makes you think "maybe today won't be that crazy after all." Then 2:00 PM rolled around, and Powell reminded everyone why FOMC days can be so brutal.
Powell’s comments sent the market into a tailspin. We're talking about a 232-point drop in 30 minutes that took price all the way down to 23,356.50. But here's where it gets interesting—the market found support in that 23,400-23,380 area and started putting in higher lows. It was like watching a boxer get knocked down and slowly get back up.
Then at 4:00 PM, Meta and Microsoft crushed their earnings, and the market liked what it saw. Price absolutely exploded higher, gaining over 300 points in minutes and taking out that all-time high at 23,689. It was the kind of move that makes you remember why you love (and hate) this business.
The value area rotated higher, settling between 23,450 and 23,560 with the POC at 23,525, but honestly, these numbers feel almost irrelevant given the catalyst-driven nature of the day's action. The profile tried to form a "D" shape during the morning session, but once FOMC hit and then earnings exploded, traditional Market Profile analysis went out the window.
The fact that we managed to close back near the settlement despite all that volatility is actually pretty remarkable and continues to show that in this market any meaningful weakness continues to be bought.
Volume & Participation
Total Volume: 539,676 – similar to Tuesday's elevated levels, confirming high engagement during the volatility
Open Interest: +3,501 contracts (NQU5) – healthy increase, likely new long positioning following the earnings-driven rally late in the session
Price Range: 332.50 points / 1,330 ticks – larger range reflecting the FOMC selloff and earnings-driven recovery
The open interest increase at the end of such a volatile session suggests institutions were using the chaos to add long exposure, particularly after the earnings beats provided fundamental justification for higher prices.
Final Thoughts
Wednesday was a perfect example of why you never count this market out. Just when it looked like Powell had thrown cold water on the party, corporate America stepped up with some solid earnings beats and reminded everyone why they were bullish in the first place.
The ability to recover from that brutal FOMC selloff and actually set new highs shows there's still serious underlying strength in this market. Sometimes you need a good shakeout to clear the weaker hands before the next leg higher.
Today’s Analysis – Thursday, 7/31/25
Market Context
Well, if yesterday was the appetizer, we're definitely getting the main course this morning. The NQ is set to open at 23,789, a whopping 308 points above yesterday's settlement, which puts us in serious out-of-balance territory to the upside. The overnight range between 23,845 and 23,686 has been remarkably controlled given the magnitude of the gap, suggesting there's some method to this madness.
We're basically floating in uncharted territory here, which makes traditional level analysis pretty much useless. When you're setting new all-time highs in the aftermarket and gapping higher overnight, you're essentially making it up as you go along.
But here's the thing—we've got another loaded day of data coming at us. At 8:30 AM, we get hit with a triple shot of PCE data, initial jobless claims, and consumer spending numbers. Then Chicago PMI at 9:45 AM. And just to keep things interesting, Amazon and Apple report after the bell tonight.
Bias & Mindset
Longer Term Bias: Bullish
Today’s Bias: Neutral
I'm staying neutral with medium confidence today, and here's my thinking: one storm has passed with FOMC and the big tech earnings behind us, but we're not out of the woods yet. This massive gap higher could easily continue if the data supports it, or we could see a classic gap-fill scenario as emotions settle and reality sets in.
My long-term bias remains bullish—yesterday's recovery from that FOMC selloff was pretty convincing—but today feels like a day where the market needs to digest what just happened. Sometimes after large moves like yesterday's, the fair value auction mechanic needs time to work and explore prices below before continuing higher. This can often confuse and frustrate traders. Be on the lookout for this, I would not be surprised to see this happen today.
The overnight action staying relatively controlled despite the gap is actually encouraging. It suggests there's some institutional discipline rather than just pure euphoria driving this thing higher.
Key Levels I’m Watching Today
Upside:
Above 23,845 — We're in the stratosphere here, folks. Levels up here don't mean much.
23,845 — Overnight high, which would be an all-time high if we see it during regular hours
Downside:
23,689 — Yesterday's high and remarkably close to last night's overnight low (23,686). That's not a coincidence and suggests some technical significance
23,560 — Yesterday's VAH, though given the catalyst-driven moves, not sure how relevant it is
23,450 — Yesterday's VAL, same caveat as above
Final Thoughts on Today
Yesterday was a reminder that in this business, you can go from hero to zero and back to hero in the span of a few hours assuming you don’t blow your account in the meantime. The FOMC selloff looked brutal in the moment, but the earnings-driven recovery showed that this market still has serious underlying strength.
Now we're dealing with another day of potential catalysts, and we're doing it from levels that would have seemed impossible just a few weeks ago. If you're a technical trader, moves like yesterday can be tough to navigate because they don't provide clean entries and the volatility can easily stop you out.
Here's some free advice: don't FOMO into moves you're not comfortable trading. The market is an endless highway of opportunity, and there's no need to force trades just because everyone else seems to be making money. Many traders have blown accounts trying to chase moves they weren’t equipped to trade.
Today brings us one step closer to tomorrow's tariff deadline, so expect to see trade deal news continue to hit the wire. That could add another layer of volatility to an already interesting setup. The key is staying flexible and not getting married to any particular scenario when you're operating in uncharted territory like this. As always, anything can happen.
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