Daily Brief - Wednesday, 5/7/25
Quiet Before the Fed storm — Bessent Talks, Powell Looms, and Trump’s Feed Might Be the Real Volatility Trigger
Disclaimer
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News Docket
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 - Tuesday, 5/6/25
Session Stats
Open: 19,795.50
High: 20,026.25
Low: 19,739.00
Close: 19,875.75
Settlement: 19,876.50
Range: 287.25 pts (1149 ticks)
Volume (Est.): 515,392
Open Interest (Prelim, NQM5): +1,558
Value Area (Market Profile)
Value Area High (VAH): 19,950.00
Point of Control (POC): 19,874.75
Value Area Low (VAL): 19,850.25
Market Profile View – 30-Min Chart
Tuesday was a Neutral Day, with minimal range extension beyond the Initial Balance (IB) — and any attempts to push outside were quickly rejected back inside.
POC and value area rotated lower again, continuing the subtle shift away from the recent rally highs.
Volume remained light and the range stayed tight, which is typical price behavior ahead of FOMC.
⚠️ Before FOMC: Keep an Eye on Treasury Secretary Bessent
Secretary Bessent is scheduled to testify before a House panel ahead of the Fed decision.
Don’t underestimate the potential for market-moving headlines here — particularly on fiscal outlook, debt policy, or trade sentiment.
🏦 FOMC Day Context
The market expects no change in rates today.
However, this is the first FOMC since the announcement of reciprocal tariffs, so Powell’s tone during the press conference will be critical.
Traders will be watching for any hint of conditions under which the Fed would begin cutting rates.
Also worth noting:
Political pressure may re-emerge. Trump has openly criticized the Fed in the past for holding rates too high. If he reacts publicly to a “no cut” decision — especially with threats or talk of replacing Powell — the market could respond negatively and swiftly.
5-Minute Chart Breakdown – NY Session
Once again, the ORB trade was absent, despite the gap-down open — continuing the recent pattern.
Price attempted to fill the gap, and succeeded around 12:00 PM ET with a strong bullish drive.
However, that move was met with a sharp seller rejection, which sent price not only back down but lower than pre-gap-fill levels.
From there, the session turned into sideways chop, until a late-day bearish spike into the close — offering a subtle shift in tone heading into FOMC.
Volume & Participation
Open Interest: +1,558 — a modest uptick, showing some new positioning ahead of the Fed
Volume: ~515k — higher than Monday, but still low compared to the past month
Range: 287 points — tight range once again, limiting opportunity for clean trend trades
Final Thoughts
Tuesday reflected a market clearly in “wait mode” ahead of the Fed, with weak conviction on both sides and a lack of sustained follow-through.
Today is all about patience and reaction, not prediction.
Watch Bessent’s comments closely early on.
Stay flat or light into FOMC unless a clean pre-event setup appears.
And be ready for post-announcement whipsaw, especially if Powell leaves any ambiguity on policy direction or if political reactions flare up.
Pre-Market Plan – Wednesday, 5/7/25
Market Context
As of this writing, overnight inventory is slightly long, trading about +60 points above Tuesday’s settlement, but still within yesterday’s range. We are likely to open in-balance, suggesting a calm open barring any early catalyst.
I’m not expecting much activity this morning ahead of FOMC, unless Treasury Secretary Bessent’s testimony stirs markets. I’ll stay flexible and ready, but with low expectations for morning momentum.
No matter what, I plan to be flat heading into 2:00 PM ET.
Powell’s 2:30 PM press conference will be the true volatility window — and I want to have both mental and capital resources intact for that opportunity.
Also, keep an eye on the news feed post-FOMC. If the Fed holds rates steady (as expected), I’d be surprised if Trump doesn’t react publicly.
Any sharp response or threats aimed at Powell could tilt market sentiment quickly.
Bias & Mindset
Bias: Neutral
Today is all about patience and readiness. If we get a tradable move from Bessent’s testimony, I’ll participate — but cautiously.
The real action starts at 2:30 PM with Powell’s tone, followed potentially by Trump’s reaction.
My goals:
Stay mentally sharp
Don’t overtrade the chop
Be fully ready to engage post-FOMC if clean momentum develops
Key Levels I’m Watching Today
Upside:
20,350.00 → 20,480.00 — Major resistance zone from late March
20,260.00 — Friday’s session high; strong seller response
20,026.00 — Tuesday’s session high
20,000.00 — Key psychological level
Downside:
19,760.00 — Thursday’s support zone / bearish spike
19,739.00 — Tuesday’s session low
19,600.00 — Daily chart level / 50-day moving average
19,470.00 — Weekly Kickoff Low
19,275.00 — Strong support (April 30) — still untested
Final Note on Today
It’s FOMC Day — the time to trade smart, not fast.
I'll preserve capital and focus until Powell speaks, knowing that opportunity often comes in the second half of days like this. If the morning is slow or choppy, that's not a reason to press. It’s confirmation to sit tight and wait.
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