Daily Brief - Wednesday, 6/18/25
Rates, Rockets, and Rollover: What Could Go Wrong Before a Holiday?
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
Wednesday - 6/18/25
8:30am EST - US Housing Starts (Expected: 1.359M)
8:30am EST - US Initial Jobless Claims (Expected: 245k)
2:00pm EST - FOMC Interest Rate Decision (Expected: 4.5%)
2:30pm EST - FOMC Press Conference w/ Chairman Powell
Prior Session Analysis - Tuesday, 6/17/25
Session Stats
Open: 22,064.00
High: 22,135.00
Low: 21,909.50
Close: 21,956.50
Settlement: 21,956.00
Range: 225.50 pts (902 ticks)
Volume: 649,544
NQM5: 173,026
NQU5: 476,443
Open Interest:
NQM5: -28,811
NQU5: +34,555
Value Area (Market Profile)
Value Area High (VAH): 22,136.00
Point of Control (POC): 22,090.00
Value Area Low (VAL): 21,980.00
Prior Session Breakdown - Market Profile and NY Session
Tuesday’s session built a clear Double Distribution profile, beginning with a brief morning attempt to continue Monday’s strength, but ultimately giving way to a breakdown triggered by macro headlines.
The day opened with a modest gap up, pushing as high as 22,135.00 in the first 45 minutes. However, the early strength lacked conviction. Price chopped in a tight range during the first half of the session, staying contained within the Initial Balance (IB). Buyers were unable to defend attempts to sustain value above 22,100.
Right around 12:30pm, the tone changed. A string of headlines — including renewed concerns over U.S. involvement in the Middle East conflict and provocative posts by Trump on social media — injected volatility and sparked a hard break to the downside.
Price broke below the IB and prior session’s VAH, and crucially, it never returned to the upper distribution. Instead, the session created a clean second distribution in the afternoon, establishing a new short-term value zone centered around 21,950.
A key structure note: buyers found support around the 21,930–21,910 zone, which was tested multiple times but held. That region appears to be a key defensive area going forward.
Despite the breakdown, the day closed fairly stable near the lows but well off the session’s extreme. This, combined with a lack of excess on either end, suggests an auction that may still be unfinished.
Volume & Participation
Volume: 649,544 — Heavy, but not the highest of the past week. Monday’s session (6/16) printed 756,513, and Friday (6/13) saw 675,860. That said, volume was still well above average, reflecting positioning into FOMC.
Open Interest:
NQM5: -28,811 — Continuing to bleed into expiration.
NQU5: +34,555 — The clear leader now for active trading.
Range: 225.50 pts — Respectable expansion following several tighter sessions last week.
My Observations (Week-in-Review Context)
Volume Pattern: Volume on Tuesday was heavy, but we’ve seen even more significant activity on Monday and Friday. The uptick across all three is classic for FOMC and rollover weeks, where traders reposition and hedge.
Value Consolidation: The 21,800–22,000 zone continues to act as a magnet. It’s been the battleground for multiple days now — sometimes support, sometimes resistance — making it a high-value price shelf.
Icebergs and Liquidity Signals: Toward the end of the session, buy-side absorption reemerged just under 22,000, consistent with the subtle accumulation behavior seen on Monday that was noted in yesterday’s analysis.
Poor Trade Location: Structurally, Tuesday was messy. After the morning’s failed breakout and the midday headline drop, typical setups like VWAP reversion or range extremes lacked edge. It was a session for adaptive, reactive trading only.
Final Thoughts
Tuesday’s session was reactive and structurally split — Double Distribution behavior with morning indecision giving way to headline-driven directional imbalance.
Despite the session’s range, trade location remained difficult:
The opening drive failed to hold, stranding early longs.
The second distribution formed fast, but offered few clean continuation setups. We may have seen some capitulation from early longs during this move which added fuel to it.
The lack of excess on both ends hints that the auction isn’t finished yet — and likely won’t be until we clear today’s FOMC risk.
With Powell on deck and global tension simmering, price is unlikely to find stability today. Don’t be surprised if we see another structurally messy session with false breaks, rapid rejections, and headline interruptions.
Today’s Analysis – Wednesday, 6/18/25
Market Context
As we head into today’s session, overnight inventory is slightly long, trading ~40 points above Tuesday’s settlement at 21,956.00 and sitting just under the psychological 22,000 level. We remain well within yesterday’s range and value area — setting us up for a potential in-balance open unless premarket catalysts change the tone.
But today is anything but typical.
We have a macro cocktail of catalysts all packed into a single trading session:
8:30am ET: Housing Starts and Jobless Claims
2:00pm ET: FOMC Statement + Rate Decision
2:30pm ET: Powell press conference
The market widely expects the Fed to hold rates steady at 4.25–4.5%, but attention will be laser-focused on the tone of Powell’s comments, the dot plot, and any forward guidance — especially in light of last week’s soft CPI print.
Adding more fuel to the fire, the market will be closed tomorrow for Juneteenth, meaning that any surprises this afternoon will not be fully absorbed or traded until Friday. Expect position squaring, volatility clusters, and potential whipsaw moves around both the economic releases and the FOMC press conference.
And as if that weren’t enough, geopolitical tensions are still simmering. The U.S. has not formally entered the conflict between Israel and Iran — but the door is open. With recent Truth Social posts from Trump and defense chatter ramping up, the risk of a surprise headline remains high. Any indication of U.S. military involvement will spike volatility.
Bias & Mindset
Bias: Tactically Neutral → Reactive
This is not a day to have strong directional bias into the open. The most responsible stance is reactive neutrality with extra awareness of time-based risk:
Morning Strategy: Trade only if the market shows clear tempo and participation, ideally after 9:30am. Be nimble and reduce size — these types of sessions often produce false breaks, especially during low-liquidity pre-FOMC drift.
Afternoon Strategy: Treat the 2:00–3:00pm ET window as a volatility trap. If you’re trading the reaction to FOMC, know your stops in advance and avoid reacting emotionally. If unsure, stay flat.
Geopolitical Risk: Stay aware of headlines. If news related to U.S. involvement drops, price will move fast — especially if it breaks the 22,000 zone or sweeps support around 21,910.
The best trades today may not come until after Powell begins speaking — volatility is a feature today, not a bug. Choose your spots with intent.
For myself, I already hedged my positions going into this week and it has been a light week for me in terms of trading. I’m not a huge fan of trading rollover weeks and so far that has appeared to be a smart decision. I plan to be hands off today unless a clear A+ setup emerges. I’ll be completely ok taking no trades today and staying flat into the holiday.
Key Levels I’m Watching Today
Upside:
22,300.00 – Psychological round number and potential breakout target if macro headlines or FOMC shift sentiment bullishly.
22,222.00 – High from Monday’s session, and the upper distribution of the double distribution profile.
22,150.00–22,175.00 – Resistance band from last week; repeated rejection zone with visible seller presence.
22,135.00 – Yesterday’s high; also marks where price reversed during late-day selling pressure.
22,026.00 - Bottom of Yesterday’s IB.
Downside:
21,980.00 – Value Area Low (VAL) from yesterday; if lost early, expect further weakness.
21,950.00 – Key price cluster and iceberg detection zone seen on 6/17; major responsive buyer interest area.
21,909.50 – Yesterday’s session low; any break below this turns the session into potential imbalance territory.
21,830.00–21,800.00 – Strong historical support zone; heavily traded value zone from last week.
Final Note on Today
Today is not just another FOMC day — it’s FOMC plus pre-holiday closure plus global military tension. Liquidity may dry up fast, and algos will dominate the first move off the Fed decision.
Stay sharp, stay small, and don’t force trades in the chop. Watch for knee-jerk reactions to reverse quickly — especially with price glued near the high-volume node around 22,000.
This is a session where discipline is more valuable than opinion.
If you’re not seeing clean structure or opportunity, cash is a position.
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