Daily Brief - Thursday, 8/7/25
Bulls Refuse to Stop the Party; All-Time Highs Now Within Striking Distance
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 - 8/7/25
8:30am EST - US Initial Jobless Claims (Expected: 222.5k)
Friday - 8/8/25
US’s Russia/Ukraine Deadline
Prior Session Analysis - Wednesday, 8/6/25
Session Stats
Open: 23,169.25
High: 23,445.25
Low: 23,148.50
Close: 23,424.75
Settlement: 23,422.75
Range: 296.75 points / 1,187 ticks
Volume: 528,398
Open Interest Change: +9,898 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,440.00
Point of Control (POC): 23,375.00
Value Area Low (VAL): 23,250.00
Prior Session Breakdown - Market Profile and NY Session
Wednesday was one of those days you wish you had just gotten long off the open and held all day—a beautiful trending session that reminded everyone why fighting the market can be so expensive. But here's what made it really interesting from a flow perspective: if you just looked at the chart, you'd think buyers were in complete control from the start. The reality was much more nuanced.
The cumulative volume delta (CVD) was telling a different story entirely. Off the open, CVD was actually negative—at one point over -2,000—even as price was grinding higher. This divergence between price moving up and selling pressure building underneath was fascinating to watch. It persisted until around 10:10 AM when we finally saw price align with the CVD and got a hard rejection off the 23,280 area.
For about 15 minutes, it looked like the bears might have their moment. Price auctioned down below VWAP, and I honestly thought we might be headed lower. But then buyers stepped in with serious conviction around Tuesday's POC at 23,175, and that's when everything changed. The CVD began to flip, with positive volume finally overtaking negative, and once that flip was complete, buyers took total control for the rest of the session.
Pro tip: whenever you see CVD flip during a session like that, it's usually a strong signal to go with the flip. The rest of the session was textbook trending behavior—instead of the usual sideways chop and "P" profile we've been seeing, price just kept grinding higher with brief consolidation periods in between.
Yesterday’s value area rotated much higher, settling between 23,250 and 23,440 with the POC at 23,375. The significant widening of the value area on similar volume to previous sessions just shows how much control buyers had from 10:25 AM onward. When you get that kind of value area expansion without a corresponding volume increase, it usually means one side is completely dominating.
The upward migration of both VAH and POC confirms that the market has accepted this higher fair value and is building legitimate value in this range.
Volume & Participation
Total Volume: 528,398 – similar to recent sessions but the distribution was telling
Open Interest: +9,898 contracts (NQU5) – very healthy increase in new business during the uptrend
Price Range: 296.75 points / 1,187 ticks – a larger than normal range reflecting sustained directional movement
The open interest increase of nearly 10,000 contracts is particularly encouraging—it shows that institutions were using the trending move to add meaningful long exposure rather than just day-trading the momentum.
Final Thoughts
Wednesday's session was a reminder in how quickly sentiment can shift when the right technical conditions align. The CVD divergence early on was a warning sign, but once that flipped and buyers took control, there was no stopping the momentum. The fact that we closed near the highs above 23,400 was a particularly bullish signal.
Sometimes the market just decides it's done consolidating and ready to move, and fighting that decision is usually expensive. Wednesday was one of those days where patience and trend-following paid off handsomely.
Today’s Analysis – Thursday, 8/7/25
Market Context
Well, would you look at that—the bulls decided they weren't quite done with their party after yesterday. The NQ is trading at 23,600 this morning, a hefty 176 points above yesterday's settlement, which puts us in serious out-of-balance territory to the upside. The overnight range between 23,639 and 23,384.50 has been relatively well-behaved given the magnitude of the gap, and we're now sitting within striking distance of those all-time highs at 23,752.
This is quite the turnaround from earlier this week when we were flirting with dropping back into that July range. Wednesday's controlled uptrend, combined with this overnight gap, has completely changed the technical picture. We've moved well away from those put walls and are firmly back in positive gamma territory, which explains why the VIX continues to drop and those storm clouds seem to be clearing.
The overnight action staying controlled rather than getting all euphoric is actually encouraging—it suggests there may be some discipline behind this move rather than just pure momentum chasing.
Bias & Mindset
Longer Term Bias: Bullish
Today’s Bias: Neutral
It might come as a shock but I’m going into this session with my bias as neutral, and here's my internal struggle: the bullish side of me is seeing very encouraging price action after we successfully avoided that July range breakdown earlier this week. Wednesday's controlled uptrend combined with a very healthy increase in new business followed by this big overnight gap has all the hallmarks of institutional accumulation, and we're tantalizingly close to new all-time highs.
But my risk management side is whispering some cautions. It appears we will have a big gap off the open, and often after moves like this, we see either a pullback off the open to rebalance price or sideways chop with the biggest move having already happened overnight. Plus, tariffs officially kick in today, which might already be priced in but is worth keeping in the front of your mind.
There's also the simple fact that with such a big overnight move, the easy money might already be made, and we could be setting up for some consolidation or profit-taking.
Key Levels I’m Watching Today
Upside:
23,752 — All-time high, the ultimate prize for the bulls
23,639 — Overnight high, first test of strength if we continue higher
Downside:
23,445 — Yesterday's high and near the VAH, first meaningful support
23,384 — Overnight low and very close to yesterday's POC
23,250 — Yesterday's VAL, more substantial support if needed
Final Thoughts on Today
We have initial jobless claims at 8:30 AM today, which could provide some volatility right off the open. And, again not to nag but let's not forget that tariffs officially kick in today—it might already be priced in, but you never know with this Jekyll and Hyde market we've been dealing with.
The technical picture has improved dramatically. We're back in positive gamma territory, the VIX is dropping, and the recent consolidation fears have given way to renewed upward momentum. Until the next thing comes up that rattles the market (and there's always something), the path of least resistance appears to be higher.
Remember that bull markets are built on a wall of worry, and we've certainly had plenty to worry about lately. The key is not fighting the trend on whatever timeframe you're trading. If the market wants to go to new highs, let it. Your job as a trader is to go with the flow, not predict where that flow should logically end.
Stay flexible, watch those jobless claims, and remember that sometimes the best strategy is simply not fighting what's right in front of you.
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