Daily Brief - Tuesday, 7/8/25
Overnight inventory leans long as NQ clings to highs, but momentum remains elusive.
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
It’s a very light week in regard to data releases. The most significant market movers will be the Reciprocal Tariffs deadline and the FOMC Meeting minutes on Wednesday. I expect a very busy news cycle leading up the the tariff deadline.
Wednesday - 7/9/25
12:00 am EST - US Reciprocal Tariffs Deadline
2:00 pm EST - FOMC Meeting Minutes
Thursday - 7/10/25
8:30 am EST - US Initial Jobless Claims (Expected: 240.5k)
8:30am EST - US Continued Jobless Claims (Expected: 1.962M)
Prior Session Analysis - Monday, 7/7/25
Session Stats
Open: 22,943.25
High: 22,977.50
Low: 22,779.75
Close: 22,883.25
Settlement: 22,884.75
Range: 197.75 points / 791 ticks
Volume: 538,641
Open Interest Change: -648 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 22,930.00
Point of Control (POC): 22,885.00
Value Area Low (VAL): 22,850.00
Prior Session Breakdown - Market Profile and NY Session
Monday's session was a normal variation day with range extension to the downside, ultimately closing in the middle of the session’s range. Structurally, the day formed a “D”-shaped profile, signaling balance and two-way trade, with some exploration to the downside during the middle of the session.
The session opened just under 23,000 and initially held steady through the morning. However, two headline-driven dips tied to tariff uncertainty caused short bursts of downside momentum. Buyers were able to recover from the second dip, which pushed price to the session low at 22,779.75. Despite these intraday swings, the session never truly left balance, and the POC formed nearly dead center of the range—a textbook sign that the market was in “wait and see” mode.
Value Area and POC rotated down from Thursday, a natural development following the parabolic rise last week and Friday’s holiday break. Notably, Monday’s VAL aligned almost exactly with last Wednesday’s VAH, reinforcing the idea that price has returned to a prior zone of acceptance.
Choppy price action and headline risk made for a challenging trading environment, particularly for traders looking for continuation or clean intraday structure. The tight range and low tempo movement offered few strong opportunities unless traders were very nimble or prepared to fade.
Volume & Participation
Total Volume: 538,641 – the highest since June 23, a sign of post-holiday re-engagement from market participants.
Open Interest: -648 contracts (NQU5) – a small decrease that suggests light profit-taking or repositioning, especially compared to Thursday’s OI build.
Price Range: 197.75 points / 791 ticks – still within a normal NQ session range, reinforcing a day of relative balance and lack of strong initiative.
The rise in volume shows that participation picked up as traders returned from the long weekend, but the flat-to-negative OI tells us this wasn’t a session of conviction or strong new positioning. The market remains cautious, likely waiting for clarity around this week’s key macro risks (tariffs and FOMC minutes).
Final Thoughts
Monday’s session was a textbook example of headline-driven chop inside a balanced market. Despite the downside range extension, the structure and internals all pointed to balance, not initiative selling. Value shifted downward, but there’s no sign of panic or a major change in sentiment—especially given the centered POC and overall “D” shape.
With volume returning and tariff headlines looming, the market feels like it’s coiled. Traders would do well to remain patient, stay adaptive, and avoid overcommitting to either direction until more clarity emerges from the macro calendar.
Today’s Analysis – Tuesday, 7/8/25
Market Context
The NQ is set to open this morning with slightly long overnight inventory, currently trading about 65 points above yesterday’s settlement at 22,950. That places price near the top of Monday’s range, but still technically in range. If price holds into the open, we could start the day out-of-balance to the upside, increasing the odds of directional movement early.
We continue to operate in a low volatility, positive gamma environment, a regime that typically suppresses big directional moves and reinforces mean-reverting behavior. Dealers are actively hedging by buying dips, which helps explain the market’s consistent resiliency. The price action we’ve seen lately—a series of 150–250 point sessions lacking strong follow-through or late-day expansion—is classic for this regime.
Adding to this, headline risk around tariffs remains, but the latest delay of the self-imposed deadline to August 1st was largely anticipated by the market. We did see some modest headline-driven volatility on Monday, but overall, market sensitivity to tariff news has faded in recent months.
The key backdrop: NQ inventory is very long, and price continues to be accepted at higher levels. Until we see a true long liquidation session—one with a large range, strong selling pressure, and a meaningful drop in open interest—it's unwise to fight the uptrend.
Bias & Mindset
Bias: Neutral → Bullish
I’m holding a neutral-to-bullish bias today, with an emphasis on patience. The structure remains supportive of higher prices, but momentum is shallow and follow-through has been limited. This is not an environment to chase. If we open out-of-balance to the upside, I’ll be looking to see if price can hold above the top of yesterday’s range and build value higher. If that fails, expect a rotation back into balance.
With volatility suppressed and positive gamma still dominant, today may again favor fade setups or early directional trades that stall and revert. Be selective, be patient, and don’t force trades if price is chopping.
Key Levels I’m Watching Today
Upside:
23,102.50 — Thursday’s High, a break above would be bullish
23,000.00 – Watch for a buyers to attempt to reclaim this level.
22,975.00 — Area of yesterday’s high and the overnight high.
Downside:
22,930.00 — Yesterday’s VAH, if price stays above this could be a sign of value moving higher today.
22,850.00 — Yesterday’s VAL, price moves below this could indicate value moving lower today.
22,808.25 — Overnight low, a break below this would be a potential short signal to me.
Final Thoughts on Today
We’re in a waiting game. Institutional traders are well-positioned, tariff risks have been mostly neutralized short-term, and without a clear catalyst, this market is unlikely to break into high gear. However, just because price action is sluggish doesn’t mean it’s directionless. The bias remains up until proven otherwise.
Stay nimble. If we start to see failed auctions at the highs or growing responsive selling with confirmation from volume and OI, that’s the clue that a rotation or liquidation may be underway. Until then, trade what’s in front of you—not what feels overdue.
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