Daily Brief - Tuesday, 5/20/25
In-Balance After Big Reclaim — NQ Eyes Breakout, But New Buyers Need to Show Up
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.
Catch me on Twitter @TheShmuts during the day covering the session as it develops.
News Docket
This week has a very light economic calendar but there is a barrage of Fed speakers throughout the week. Tuesday, 5/20 is the heaviest day with 6 Fed governors set to speak at various times.
Thursday - 5/22/25
8:30am EST - US Initial Jobless Claims (Expected: 230k)
9:45am EST - US S&P Services PMI Flash (Expected: 51)
9:45am EST - US S&P Manufacturing PMI Flash (Expected: 49.9)
10:00am EST - US Existing Home Sales (Expected: 4.1M)
Prior Session Stats & Analysis - Monday, 5/19/25
Session Stats
Open: 21,203.25
High: 21,544.50
Low: 21,202.25
Close: 21,523.25
Settlement: 21,527.00
Range: 342.25 pts (1369 ticks)
Volume (Est.): 521,392
Open Interest (Prelim, NQM5): -1,121
Value Area (Market Profile)
Value Area High (VAH): 21,549.75
Point of Control (POC): 21,475.00
Value Area Low (VAL): 21,450.25
Prior Session Breakdown
Market Profile – 30-Minute View
Monday was a Normal Variation Day with range extension to the upside that held into the close — a signal of potential bullish continuation.
Value area and POC rotated upward again, though overlapping with Friday’s
A single-print buying tail formed at the low — a sign of early buyer aggression
No excess at the high, suggesting buyers ran out of steam rather than being outright rejected
NY Session – 5-Minute Chart View
The day began with a ~200-point gap down, but buyers stepped in immediately, auctioning price up with strong conviction.
The entire gap filled in under 10 minutes — a rare and decisive rejection of lower prices.
What stood out was the complete absence of selling pressure until the gap fill completed and price reached the 21,345 area. Mark that zone — if price revisits it in coming sessions, it could serve as a key reaction area.
From 10:00 to 11:30am, buyers and sellers battled near the prior VAL, but buyers ultimately prevailed, driving price through Friday’s entire range until it stalled near last week’s high around 21,530.
Price later auctioned back into the value area, made one last push above it — and was rejected into the close.
Despite the Moody’s downgrade over the weekend, Monday’s action showed the market isn’t worried.
The credit rating cut was shrugged off, and buyers proved they’re still in control — with ES showing nearly identical structure, this was a broad-based signal, not just tech-specific.
Volume & Participation
Open Interest: -1,121 — third straight session of business being pulled
Volume: ~521k — about 100k higher than Friday, but still average for NQ
Range: 342 points — healthy expansion, though VA width remained similar to Friday’s narrower session
Final Thoughts
The market sent a clear message Monday:
The downgrade doesn’t matter — the rally’s still intact.
But it’s worth noting:
The third consecutive drop in open interest could still be signaling caution
Buyers are in control, but they’re doing it with less participation behind them
Heading into the week, this kind of structure suggests that the market wants higher, but needs fresh fuel — or a clear breakout catalyst — to do it with confidence.
Pre-Market Plan – Tuesday, 5/20/25
Market Context
As of this writing, overnight inventory is slightly short, trading ~70 points below Monday’s settlement. That places price well within yesterday’s value area, setting us up for an in-balance open.
There are no major economic releases this morning, but we’ve got six Fed speakers on the docket throughout the day.
Even if the market seems tuned out to Fedspeak lately, it's never wise to assume it can’t move the tape — especially in an already low-participation environment.
Context from yesterday:
The market showed impressive strength in rejecting the overnight gap down and marching all the way back to last week’s high (21,530).
While that level capped price action during RTH, overnight trade briefly broke above it before pulling back into range.
This tells me the rally is still alive and well, though buyers may need fresh commitment to break out with authority.
Bias & Mindset
Bias: Neutral → Bullish
Yesterday’s session forced a recalibration — this rally still has fuel. The swift rejection of the downgrade news and the gap recovery made that clear.
That said, I’m still watching with some caution:
We've now had three straight sessions of declining open interest
That suggests profit-taking or potential for a long liquidation session.
If this truly is “old business” exiting, then we should soon see new business enter to sustain higher prices
If that doesn’t happen, it may signal the rally is running on fumes — at least temporarily.
Since we’re opening in-balance, I’ll remain patient and let structure develop.
Two key zones have my attention:
21,530 – Last week’s high. If price breaks and accepts above, I’ll look for long setups.
21,345 – Top of Monday’s single-print buying tail. A break below could shift tone short-term.
If we remain rangebound, I’ll let the market show its hand first before committing.
Key Levels I’m Watching Today
Upside:
21,530 — Last week’s high. Multiple failed attempts to break above; clean acceptance here would be bullish.
21,460 — Area of highest volume Monday; buyers were dominant in this zone.
Downside:
21,345 — Top of yesterday’s single-print buying tail. Buyers appeared aggressively below this on Monday.
21,000 → 20,960 — Prior breakout zone; key area of structure
20,910 — High-volume congestion from May 12
Final Note on Today
We’re opening quietly, but don’t mistake that for passivity.
If buyers reassert near yesterday’s lows, this rally likely continues. If not, we’ll need to reassess momentum — especially if new business doesn’t step in soon.
Be patient early. Let the Fed speakers and price action develop. No need to force trades in balance conditions.
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