Daily Brief - Tuesday, 5/6/25
Gap down into no-man’s land — conviction needed, but FOMC caution may dominate.
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News Docket
Tuesday - 5/6/25
8:30am EST - US Trade Balance (Expected: -136.7B)
8:30am EST - Canadian Trade Balance (Expected: -1.6B)
4:15pm EST - AMD Q1 2025 Earnings
Wednesday - 5/7/25
10:00am EST - Treasury Secretary Bessent testifies to House Panel
2:00pm EST - FOMC Rate Statement
2:00pm EST - US Interest Rate Decision (Expected: 4.5%)
2:30pm EST - FOMC Press Conference w/ Chair Powell
Thursday - 5/8/25
8:30am EST - US Initial Jobless Claims (Expected: 230k)
Prior Session Stats & Analysis - Monday, 5/5/25
Session Stats
Open: 20,010.25
High: 20,191.50
Low: 19,985.25
Close: 20,065.50
Settlement: 20,055.50
Range: 206.25 pts (825 ticks)
Volume (Est.): 419,419
Open Interest (Prelim, NQM5): +43
Value Area (Market Profile)
Value Area High (VAH): 20,150.00
Point of Control (POC): 20,125.25
Value Area Low (VAL): 20,049.75
Market Profile View – 30-Min Chart
Monday was a Nontrend Day — the market stayed largely within the initial balance, with only a brief upside extension before settling back inside during the final three TPOs.
Tight range and narrow value area = limited trade facilitation
Low participation = few large players active
POC and value area rotated down from Friday — a rare occurrence in the last eight sessions
This type of session is common ahead of major events, and with FOMC on Wednesday, it’s not surprising we saw a slowdown in price discovery and energy.
5-Minute Chart Breakdown – NY Session
The session opened choppy and indecisive, with neither side asserting control early.
Around 10:30 AM, price rejected a move below Friday’s session low, and a slow, patient uptrend formed.
This move lasted until about 2:30 PM, but was flat and difficult — offering few clean setups unless you were willing to sit through chop.
At 2:45 PM, sellers reappeared near Friday’s settlement, auctioning price sharply back below the value area.
The move held through the close, but Friday’s low acted as support again to cap the day.
Overall, this was a low-conviction, low-energy session — the kind best avoided. No strong directional edge, and plenty of false breaks.
Personally, I took no trades — a textbook “sit on hands” kind of day.
Volume & Participation
Open Interest: +43 — basically flat. With ES showing a loss of -4,000, this may revise negative by final print
Volume: ~419k — lowest since March 24th
Range: 206 points — very tight, confirming a lack of large timeframe involvement
Final Thoughts
Yesterday was the kind of session that favors discipline over action. With FOMC just two days away, big players were likely sitting on the sidelines, and price reflected that.
I would not be surprised to see more of the same today unless a surprise catalyst shakes things up.
Pre-Market Plan – Tuesday, 5/6/25
Market Context
As of this writing, overnight inventory is very short, with price trading ~200 points below Monday’s settlement and gapping ~130 points beneath Monday’s range. We are set to open out-of-balance to the downside.
The big question today:
Are we seeing a true higher timeframe bearish continuation, or just a pullback within the 9-session rally?
My view: the rally broke out of the broader downtrend, but now price is in “no man’s land.”
It could easily go either way — there’s no clear structure right now.
I'm watching 19,600 closely — that zone aligns with:
Prior support from early March
The 50-day moving average on the Daily chart
If we break below 19,600, I’ll lean more strongly toward a broader bearish continuation.
If we bounce there, this may just be a healthy pullback after a short-squeeze-driven rally.
Optional context:
I still believe last week's rally was fueled by a large-scale short squeeze (as noted in Monday’s briefing), and nothing in the options data has changed to support a shift toward sustainable upside. That said, a lack of buying doesn't automatically mean reversal — it could mean institutional money is simply waiting.
👉 Billions have flowed out since early April. That capital may be sitting in cash, waiting on clarity from FOMC or tariff news.
Bias & Mindset
Bias: Bearish
We’ve gapped down, momentum has cooled, and FOMC is tomorrow — which often means caution from large players.
I’ll need to see clear conviction before putting on risk.
I’m particularly focused on avoiding early-session chop, like we saw Monday.
Trading Plan:
I’ll look for a gap day Opening Range Breakout (ORB) to the downside
I’ll also watch closely for a failed gap fill setup
🧠 Behavioral note:
ORB setups have underperformed recently on gap days.
However, failed gap fills have been more common.
This suggests overnight moves have been too extended, and RTH participants are rebalancing price first before choosing direction.
If I do take an ORB trade today, I’ll use a tighter stop, knowing this setup has had lower odds in the current environment.
If the gap begins to fill or price stalls, I’ll shift to patience mode, waiting to see if we get directional intent later in the session.
A repeat of yesterday’s chop would not surprise me.
Key Levels I’m Watching Today
Upside:
20,350.00 → 20,480.00 — Prior resistance cluster (late March)
20,260.00 — Friday’s session high; sellers stepped in hard
20,000.00 — Key psychological level
19,985.00 — Yesterday’s session low
Downside:
19,760.00 — Support zone from Thursday’s late-day bearish spike
19,600.00 — Key Daily level & 50-day moving average
19,470.00 — Weekly Kickoff Low
19,275.00 — Strong support from April 30 (untested)
Final Note on Today
Today is about focus and flexibility.
We’re opening into key technical levels with macro risk on deck (FOMC tomorrow). The short-term trend is vulnerable, and participants may stay cautious until Powell speaks and/or we get tariff trade deal news.
If we see conviction — I’ll trade it.
If not — I’ll let the market sort itself out.
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