Daily Brief - Tuesday, 8/11/25
New High, Sharp Rejection, CPI Roulette: Monday's Drama Sets Up Data Day
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 - 8/12/25
US-China Tariff Deadline
8:30am EST - US CPI YoY (Expected: 2.8%)
8:30am EST - US CPI MoM (Expected: 0.2%)
8:30am EST - US Core CPI YoY (Expected: 3%)
8:30am EST - US Core CPI MoM (Expected: 0.3%)
Thursday - 8/14/25
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: 2.9%)
8:30am EST - US Core PPI MoM (Expected: 0.2%)
8:30am EST - US Initial Jobless Claims (Expected: 225k)
Friday - 8/15/25
8:30am EST - US Retail Sales MoM (Expected: 0.5%)
9:15am EST - US Industrial Production MoM (Expected: 0%)
10:00am EST - University Michigan Sentiment Prelim (Expected: 62)
Prior Session Analysis - Monday, 8/10/25
Session Stats
Open: 23,715.75
High: 23,804.50
Low: 23,587.50
Close: 23,638.50
Settlement: 23,637.50
Range: 217.00 points / 868 ticks
Volume: 444,559
Open Interest Change: +287 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 23,770.00
Point of Control (POC): 23,735.00
Value Area Low (VAL): 23,680.00
Prior Session Breakdown - Market Profile and NY Session
Monday delivered one of those classic "give with one hand, take with the other" sessions that can really mess with your head if you're not careful. Buyers started the day with all the confidence in the world, taking control right off the open and auctioning price above Friday's VAH. When price came back down to retest that level, buyers stepped in again like clockwork, showing they meant business.
This second push took us to a new all-time high of 23,804.50 just after noon, and for a moment, it looked like we might be off to the races. But that's when the market reminded everyone that new highs don't automatically mean smooth sailing. The rejection at 23,804.50 was swift and decisive, and sellers took complete control for the rest of the session.
What followed was a fairly steep auction lower that took price all the way down to 23,587.50—a drop of over 200 points from the highs. The concerning part wasn't just the selling, but the fact that buyers didn't step in at the close. Price finished near the lows of the day, which definitely wasn't what the bulls wanted to see heading into today's CPI release.
The session developed into a neutral extreme day to the downside with a "P"-shaped profile and clear downside range extension. Despite the selling pressure, the majority of price and time was still spent in the upper half of the range, and we saw excess on both ends of the profile, indicating the rotational nature of the session.
Interestingly, the value area actually rotated upward despite the late-day selling, settling between 23,680 and 23,770 with the POC at 23,735. The value area width was similar to or slightly larger than Friday's session, indicating increased trade facilitation on comparable volume.
This upward rotation in value area despite the close near the lows suggests that most of the serious institutional business was conducted during the morning strength rather than the afternoon weakness. It's a subtle but important distinction that could matter for how today develops.
Volume & Participation
Total Volume: 444,559 – similar to Friday's session, showing consistent engagement at these levels
Open Interest: +287 contracts (NQU5) – very small increase, notable that it's still positive despite the afternoon selloff
Price Range: 217.00 points / 868 ticks – modest range reflecting the likely lack of institutional participation in the selling
The minimal open interest change despite the volatility is interesting. These are preliminary numbers, so I wouldn't be surprised to see the final tally turn negative, but the fact that we're even close to flat after that kind of selling suggests the liquidation wasn't as institutional as it might have appeared.
Final Thoughts
Monday was a perfect reminder that new all-time highs don't guarantee easy money. The market gave us a fresh record, then immediately made everyone pay for celebrating too early. The rotational nature of the session, with excess on both ends, suggests this was more about position adjustment and profit-taking than any fundamental shift in sentiment.
The key takeaway is that despite touching new highs, the market spent most of its time and energy in familiar territory. Sometimes that's just how price discovery works at record levels—you test new ground, get rejected, and then figure out where you actually belong.
Today’s Analysis – Tuesday, 8/11/25
Market Context
The overnight session has been remarkably calm considering yesterday's drama, with the NQ currently trading at 23,650, just 12 points above yesterday's settlement. The overnight range between 23,676.76 and 23,596 has been tight and contained, suggesting we're opening in balance despite yesterday's late-day weakness.
Today's the big day everyone's been waiting for—CPI drops at 8:30 AM this morning, and it's going to have a heavy impact on whatever happens next. We're sitting near the bottom of yesterday's range, so opening out-of-balance to the downside if CPI comes in bearish is definitely not out of the question.
On the positive side, the China tariff deadline got pushed back another 90 days, which was pretty much expected. The Chinese rare earth trump card (no pun intended) essentially dictates that we have to get a deal done with them. They know it, we know it, and they've got most of the leverage in this fight.
The VIX has been elevated over the last few days but remains very low compared to its recent history. We're still in that positive gamma environment with dealer behavior supporting dips, though headline sensitivity remains sky-high.
Bias & Mindset
Longer Term Bias: Bullish
Today’s Bias: Neutral
I'm staying completely neutral with low confidence because honestly, I'm not sure what to expect today. CPI is the wild card that could send us in either direction, and I'm genuinely uncertain which way the market will react regardless of what the number shows.
Here's the thing that's got me scratching my head: we might be in one of those "bad news is good news" environments right now. If CPI comes in hot, it could actually rally the market because it would put more pressure on the Fed for rate cuts. But if it comes in cool, does that remove rate cut expectations and hurt risk assets? Or does it just confirm that inflation is under control and we can keep partying?
I honestly have no idea, and that's probably the most honest assessment I can give. Sometimes the market's reaction to data has more to do with positioning and sentiment than the actual numbers themselves.
Key Levels I’m Watching Today
Upside:
23,770 — Yesterday's VAH, key resistance level
23,735 — Yesterday's POC and largest high volume node
23,680 — Yesterday's VAL, interesting that it matches the overnight low area
Downside:
23,596 — Overnight low, first meaningful support
23,587.50 — Yesterday's low, below this we've got a long way to fall with not much structure
23,540 — VAH from August 7th, but not a particularly reliable level
Final Thoughts on Today
Today's CPI release is the biggest data drop of the week, and with all eyes on inflation and the effects of tariffs, this number carries extra weight. The tricky part is that the market's reaction might not be straightforward—we could be in one of those environments where any outcome gets spun as bullish for different reasons.
Be patient today, especially since we're starting near the bottom of yesterday's range. The overnight action has been constructive, but CPI could change everything in a matter of seconds. Sometimes the best strategy on data days is just staying out of the way until the dust settles and then trading the reaction rather than trying to predict it.
The China tariff extension removes one potential headwind, but the inflation data could introduce new ones depending on how it prints and how the market chooses to interpret it. In this environment, flexibility and quick reaction times tend to matter more than having strong opinions about direction.
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