Daily Brief - Tuesday, 7/1/25
Q3 Opens in Balance: All Eyes on Powell and PMI
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 - 7/1/25
9:30am EST - Powell, Lagarde, Bailey & Ueda Speak
9:45am EST - US S&P Manufacturing PMI Final (Expected: 52)
10:00am EST - US ISM Manufacturing PMI (Expected: 48.8)
Wednesday - 7/2/25
8:15am EST - US ADP Employment Change (Expected: 110k)
Thursday - 7/3/25
8:30am EST - US Average Earnings YoY (Expected: 3.9%)
8:30am EST - US Unemployment Rate (Expected: 4.3%)
8:30am EST - US Trade Balance (Expected: -69.8B)
8:30am EST - US Initial Jobless Claims (Expected: —)
8:30am EST - US Nonfarm Payrolls (Expected: 120k)
9:45am EST - US S&P Services PMI Final (Expected: —)
9:45am EST - US S&P Composite PMI Final (Expected: —)
10:00am EST - US Factory Orders MoM (Expected: 7.8%)
10:00am EST - US ISM Services PMI (Expected: 50.8)
Friday - 7/4/25
US Holiday - Markets Closed
Prior Session Analysis - Monday, 6/30/25
Session Stats
Open: 22,871.75
High: 22,934.75
Low: 22,781.00
Close: 22,885.50
Settlement: 22,893.25
Range: 153.75 points / 615 ticks
Volume: 434,952
Open Interest Change: +8,824 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 22,860.00
Point of Control (POC): 22,845.00
Value Area Low (VAL): 22,800.00
Prior Session Breakdown - Market Profile and NY Session
Monday delivered a Neutral Extreme day with a dramatic afternoon reversal following a very quiet and difficult morning session. Price tested both extremes of the Initial Balance (IB), ultimately closing strongly above the IB and just shy of session highs.
The day began with a small gap to the upside and an Initial Balance (IB) of only ~82 points—very tight for NQ—signaling compression and indecision. The majority of the session up until 2:20pm was choppy, with overlapping price action and little opportunity for directional trades. It was a tough environment for most setups.
Around 2:00pm, headline news about progress in tariff negotiations with Japan and the EU injected life into the market. Price quickly auctioned down below the IB, setting the session low at 22,781.00 around 2:42pm. That dip was met with strong buying interest—a classic example of positive dealer gamma dynamics in action. As expected, buyers stepped in aggressively to defend lower prices.
This rejection of the lows kicked off a powerful upside auction through the IB and beyond, topping out at 22,934.75. Price then drifted modestly lower into the close, but still finished well above the IB—a defining feature of a Neutral Extreme structure. The high close near the top of range signals buyer control into end-of-day.
It’s also worth noting that this type of late-session movement may have been driven in part by end-of-quarter adjustments and Quarterly OPEX activity, which often encourages large players to adjust exposure ahead of reporting deadlines.
On the bigger picture, we remain extended on the Daily chart, now trading well above the June balance area. With the market pressing toward the round number magnet of 23,000, a pullback or consolidation before continuation would be technically reasonable. If either occurs, based on market structure, I would mark the 22,700 area as the potential base of that pullback or consolidation range.
Volume & Participation
Total Volume: 434,952 – normal to lower volume, slightly above last week’s average.
Open Interest: +8,824 contracts (NQU5), a healthy increase showing that likely new longs were established during the rally.
Price Range: 153.75 points - small range reflecting the tight price action for the majority of the session before the volatility entered later in the day.
Volume picked up alongside the rally and into the quarterly expiration, confirming greater interest from both institutional and retail participants. The rise in OI adds credibility to the buying—this wasn’t just short covering. End-of-quarter rebalancing may have also contributed to these changes in participation.
Final Thoughts
Monday’s session was a textbook example of why patience matters. The best opportunity didn’t come until nearly 2:30pm after hours of dull, choppy movement. Recognizing the neutral setup and compression early helped define expectations, and being alert to headline-driven breakouts paid off.
Looking ahead, we’re still pressing into new all-time highs, but the technical extension on the higher timeframe suggests that some consolidation or pullback would be healthy before any attempt to pierce 23,000. With macro tensions cooling and dealer positioning supportive, bulls are in control—but elevated price means risk management must remain sharp.
Today’s Analysis – Tuesday, 7/1/25
Market Context
We’re kicking off a new quarter today with price set to open in-balance and within yesterday’s range. Overnight inventory is modestly short, with current price trading ~55 points below Monday’s settlement and around the midpoint of yesterday’s tight distribution. This suggests a calm overnight session, but don’t expect that tone to necessarily carry into RTH.
This morning is front-loaded with potential catalysts:
9:30am – Multiple Fed speakers, including Chairman Powell, who has proven to move markets with even small shifts in tone.
9:45am – S&P Manufacturing PMI Final
10:00am – ISM Manufacturing PMI
With this much data stacked in the first 30 minutes of RTH, we should expect volatility around the open, especially in a thinner holiday week. Staying flat until 10am is a prudent risk-management decision today.
Also keep in mind:
This is the first full session of a new quarter, which may bring institutional repositioning or rotational flows, particularly in underlying equities.
Only today and tomorrow are full trading days this week. Markets close early on Thursday (1pm ET) and are fully closed Friday for the July 4th holiday. That means volume could swing in either direction—some funds will want to get business done early, while others may already be stepping aside.
Bias & Mindset
Bias: Neutral
I’m approaching today’s session with a neutral bias. We’re opening in-balance, within yesterday’s range, and overnight inventory is only modestly short—so there’s no strong directional conviction coming into the session. With Powell speaking at 9:30am, followed by PMI data at 9:45 and 10:00, I expect the first 30 minutes of RTH to be volatile, potentially erratic. My plan is to stay flat until that data is absorbed and the market shows its hand. Bulls still have the edge structurally, with positive gamma positioning by dealers and a low VIX signaling calm, dip-buying conditions. That said, price is extended on the higher timeframe and it’s the first full session of the quarter—so we could just as easily see balance or rotation. I’ll stay patient, assess structure as it forms, and only engage when setups align with broader context and clarity emerges post-news.
Key Levels I’m Watching Today
Upside:
Note: We are trading in uncharted territory after setting a new all-time high. Levels above are based on overnight activity and psychological round numbers — expect price discovery to guide future resistance.
23,000.00 – Psychological round number (watch for responsive selling or magnet effect)
22,934.75 - Yesterday’s High
22,914.00 – Overnight high (interestingly same as yesterday)
22,880.00 – Largest high-volume node (HVN) from Friday's session
22,860.00 - Yesterday’s Value Area High (VAH)
Downside:
22,840.00 → 22,817.00 – Yesterday’s Largest HVN
22,813.00 – Overnight low
22,800.00 – Yesterday’s Value Area Low (VAL)
22,781.00 – Yesterday’s Low
Final Thoughts on Today
Markets are entering Q3 at all-time highs, with strong bullish structure and waning macro fear. Today’s setup is one that rewards patience and discipline. With early economic releases and Powell on deck, the open could be deceptive or noisy. Let the dust settle, then look for setups aligned with the broader market context.
Know your style. If you’re a momentum or breakout trader, look for clean structure and tempo—don’t force trades in the chop. If you’re a fade trader, this environment may offer opportunity on emotional swings caused by news—but only if you’re fast and selective.
Volume and participation may spike this morning but could taper off as we approach the mid-week holiday lull. Be selective, stay sharp, and as always, protect your capital.
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