Daily Brief - Wednesday, 2/26/25
Consistent selling off the open the past four sessions. Will we see it again today? NVDA earnings today after the bell, will it be a make-or-break moment for the market?
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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.
Upcoming News
Wednesday - 2/26/25
10:00am EST - US New Home Sales - Units (Expected: 0.675M)
4:05pm EST - NVDA Earnings
Thursday - 2/27/25
8:30am EST - US Initial Jobless Claims (Expected: 222k)
8:30am EST - US GDP QoQ 2nd Estimate (Expected: 2.3%)
8:30am EST - US Durable Goods (Expected: 2%)
Friday - 2/28/25
8:30am EST - US PCE Price Index YoY (Expected: 2.5%)
8:30am EST - US PCE Price Index MoM (Expected: 0.3%)
8:30am EST - US Core PCE Price Index YoY (Expected: 2.6%)
8:30am EST - US Core PCE Price Index MoM (Expected: 0.3%)
8:30am EST - US Consumer Spending MoM (Expected: 0.2%)
Prior Session Stats and Analysis - Tuesday, 2/25/25
Session Open: 21,391.00
Session High: 21,397.50
Session VAH: 21,254.75
Session POC: 21,181.75
Session VAL: 21,108.75
Session Low: 20,990.00
Session Close: 21,149.75
Session Settlement: 21,149.00
Session Range: 407.5 pts, 1630 ticks
OI Change (Prelim): +5,178 (NQ) / -2,090 (MNQ)
Est Volume: 796,984
Prior Session Analysis
Yesterday’s session was a Normal day with an increase in new business of +5,178 contracts on above average volume of 796,984 contracts traded.
Yesterday’s price action pattern off the open should be very familiar to traders by now, it’s been repeating itself since Feb 20th; a selloff off the open, then a bounce between 10-10:30am.
This ongoing pattern of selling off the open when liquidity is highest then stopping mid-morning has the hallmarks of large participant(s) unwinding long positions, likely as either a hedge for NVDA earnings today or in response to macro conditions, tariffs, etc. The interesting part of that is we are still seeing a fairly moderate increase in new business each day in spite this selling, so someone is buying into this selling. Such is the market, everyone has a different outlook and sentiment read.
The most notable thing on the chart yesterday was the market “dipped its toe” so to speak below the 21,000 level to test if there was any business to be done down there. There wasn’t any appetite for lower prices yesterday, buyers stepped in quickly and auctioned price back up and sideways for the remainder of the session.
The reason why this is notable is because the market has a tendency to do this around key levels and then test again in following sessions. On Feb 20th, a similar pattern was seen at the 22,000 level. An auction down off the open, “dipped its toe” below 22,000, there was no interest from participants in lower prices that session and price auctioned back up. In the next session, Feb 21st, again there was an auction down off the open, some consolidation just below 22,000, and then finding interest in lower prices the market continued to auction lower below 22,000.
Will participants auction price below 21,000 today? I don’t know, but market participants do tend to test these levels more than once. Keep an eye out for it.
Plan for Today - Wednesday, 2/26/25
At the time of this writing, overnight inventory is long, +100 points over yesterday’s close and slightly above yesterday’s value area. It does appear we will open in-balance with yesterday’s range, remains to be seen if we open above prior value.
My plan for today is to watch for another selloff off the open, and take it if the pattern repeats itself. If this happens I will look for another potential retest of the 21,000 level.
If the selloff does not materialize, I plan to be patient and wait to see what the market is going to do today. With NVDA earnings looming after the bell, I would not rule out a sideways day today as the market waits. In the case of a sideways day, unless clear edges develop, range trading will be off the table for me and I’ll sit on my hands.
We do have US New Home Sales data at 10am, I will be flat before this news is released.