Daily Brief - Tuesday, 5/13/25
From Full Send to What’s Next — CPI Lands Soft, But Market Might Need a Breather
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
Tuesday - 5/13/25
8:30am EST - US CPI YoY (Expected: 2.4%, Actual: 2.3%)
8:30am EST - US CPI MoM (Expected: 0.3%, Actual: 0.2%)
8:30am EST - US Core CPI YoY (Expected: 2.8%, Actual: 2.8%)
8:30am EST - US Core CPI MoM (Expected: 0.3%, Actual: 0.2%)
Thursday - 5/15/25
8:30am EST - US Retail Sales MoM (Expected: 0.1%)
8:30am EST - US PPI YoY (Expected: 2.5%)
8:30am EST - US PPI MoM (Expected: 0.2%)
8:30am EST - US Core PPI YoY (Expected: 3.1%)
8:30am EST - US Core PPI MoM (Expected: 0.3%)
8:30am EST - US Initial Jobless Claims (Expected: 220k)
9:15am EST - US Industrial Production MoM (Expected: 0.1%)
Friday - 5/16/25
8:30am EST - US Housing Starts (Expected: 1.365M)
10:00am EST - University Michigan Sentiment Prelim (Expected: 53.3)
Prior Session Stats & Analysis - Monday, 5/12/25
Session Stats
Open: 20,919.00
High: 20,996.00
Low: 20,690.00
Close: 20,949.75
Settlement: 20,948.75
Range: 306 pts (1224 ticks)
Volume (Est.): 639,896
Open Interest (Prelim, NQM5): +16,852
Value Area (Market Profile)
Value Area High (VAH): 20,962.00
Point of Control (POC): 20,906.75
Value Area Low (VAL): 20,812.75
Market Profile View – 30-Min Chart
Monday’s session was a Neutral Extreme Day, with range extension on both sides of the IB and a close in the upper extreme — typically a bullish continuation signal.
The session opened with a massive ~800-point gap on news of a 90-day tariff pause with China and real progress toward a final trade deal. As noted in my pre-market plan, I had concerns that the bulk of the move occurred overnight, and that RTH might be limited. Unfortunately, that’s exactly how it played out.
If you don’t trade the overnight session, days like this can be frustrating. But it’s a reminder:
The market owes you nothing — and doesn’t care what you want. It doesn’t even know, or care, that you exist. Trade what you see, not what you wish for.
The day ended with a 306-point range, split between two phases:
Morning: Profit-taking and hesitation
Afternoon: Steady, controlled buying, culminating in a late-day spike
Higher Timeframe Notes:
Daily close above the 50-day and 200-day MAs — a major shift in sentiment from just a week ago
Gap below from ~20,690 → 20,340 could come into play if the rally fails
On the 1-hour chart, the 20,960–21,000 zone is acting as resistance and could be a key inflection area going forward. Could turn into support if/when price is able to break above it.
5-Minute Chart Breakdown – NY Session
The session opened with profit-taking, which was expected after the large overnight rally.
📉 How do we know it was profit-taking?
The VIX.
From 9:30–9:50 AM, both NQ and the VIX dropped. When that happens, the decline is likely not driven by fear, but by profit-taking or rebalancing, which usually doesn't hold.
At 10:15 AM, the VIX spiked, preceding a second leg down from a consolidation zone — which looked like a higher-probability move. But that read proved wrong. The VIX reversed, and NQ stabilized.
From that point on, NQ and the VIX traded inversely, with NQ recovering and continuing to climb into the afternoon.
VWAP Behavior:
VWAP was in play all morning — price stuck to it, faded off it, and retested multiple times.
That’s typical of institutional algos trading limit orders, not aggressive initiative.
Once price broke above VWAP around 12:00 PM and never came back, the tone shifted:
Buyers took control, and sentiment turned decisively positive.
Despite buyer control, price struggled to clear the overnight high (20,991.50) for most of the day.
20,940 acted as resistance
The late-day spike finally broke through, offering one of the best setups of the day for traders who stayed alert into the close
Volume & Participation
Open Interest: +16,852 — huge increase in new business, likely new longs
Volume: ~640k — solid but underwhelming given the size of the gap
Range: 306 points — underwhelming considering the overnight move, but the structure was clean
Final Thoughts
Monday was a headline-driven gap-and-hold session, with limited RTH opportunity unless you were patient or caught the late-day breakout.
The key now is whether buyers can defend this new price zone, or if we begin to fill the gap below. The move over the 50/200-day MAs is significant, but as always — headlines rule the day until structure firms up.
Respect momentum, but don’t chase noise. Let price confirm.
Pre-Market Plan – Monday, 5/12/25
Market Context
As of this writing, overnight inventory is slightly long, trading about +50 points above Monday’s settlement.
CPI data came in at or below expectations — as expected (yes, expectations were that it would be below expectations… classic). NQ initially rallied on the number, briefly pushing above 21,000, but has since drifted back into the 20,960–21,000 range mentioned in yesterday’s analysis.
Currently, we’re set to open slightly out-of-balance to the upside, though the move is small. The key here is yesterday’s close near the high, so even a +50 open positions us above the prior day’s range.
Bigger picture:
Structure remains intact, and momentum is still with the bulls
That said, after a strong move like Monday’s, the higher probability is for a pullback or consolidation
A pause here would be healthy — it gives the market a chance to digest gains and invite in new long positioning
There’s still an open gap below from ~20,690 → 20,340. If sellers step in, I’ll be watching how price interacts with that zone. A shallow dip may just be a buying opportunity. A deep fill could hint at fading sentiment.
🗺️ Geo-Macro Note:
Trump is currently visiting the Middle East, where the Saudis are rumored to be eyeing significant U.S. investment.
Their involvement may hinge on policy clarity from Trump.
It’s no coincidence that China tariff news dropped just before this trip — timing matters.
If news breaks that Saudi capital is coming in, expect bullish sentiment and fresh liquidity. If the meeting goes south or expectations aren’t met? The market could quickly price out that hope.
Bias & Mindset
Bias: Neutral → Bearish
My lean today is probability-based, not emotional.
After a big push like yesterday’s, the market often seeks balance before continuing. This doesn’t mean I’m bearish long-term — just realistic that chasing highs the day after a breakout often ends in poor R:R setups.
Even with a low CPI, the reaction so far has been muted — which suggests the data was already priced in. If buyers want more, they’ll need fresh fuel.
No matter what: I won’t fight price. But I also won’t be early to buy a market that’s overdue to cool off.
My game plan: look for an ORB or failed gap fill, and any strong momentum based setups.
Key Levels I’m Watching Today
Upside Targets:
Not listing any — I don’t believe in them today.
Until a dip or consolidation forms, there’s no meaningful structure to lean on above. I’d rather say nothing than invent levels I don’t trust.
Downside Levels:
21,000 → 20,960 — Key prior resistance zone; may act as support now
20,825 — Overnight support area
20,755 → 20,690 — Strong support during Monday’s opening pullback
(Beyond that, the full gap remains open to 20,340)
Final Note on Today
Yesterday’s RTH gave little opportunity after the overnight run. Today could be different — but only if we get tradable structure.
Stay patient. Don’t force longs into a potential shakeout. Let the market show its hand — pullback, consolidate, or trap breakout?
Any of them are possible. As a day trader my job is to react — not predict.
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