Daily Brief - Wednesday, 7/2/25
Profit-taking remains controlled with the VIX flat and no signs of panic.
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 - 7/2/25
8:15am EST - US ADP Employment Change (Expected: 110k)
Thursday - 7/3/25
8:30am EST - US Average Earnings YoY (Expected: 3.9%)
8:30am EST - US Unemployment Rate (Expected: 4.3%)
8:30am EST - US Trade Balance (Expected: -69.8B)
8:30am EST - US Initial Jobless Claims (Expected: —)
8:30am EST - US Nonfarm Payrolls (Expected: 120k)
9:45am EST - US S&P Services PMI Final (Expected: —)
9:45am EST - US S&P Composite PMI Final (Expected: —)
10:00am EST - US Factory Orders MoM (Expected: 7.8%)
10:00am EST - US ISM Services PMI (Expected: 50.8)
Friday - 7/4/25
US Holiday - Markets Closed
Prior Session Analysis - Tuesday, 7/1/25
Session Stats
Open: 22,802.25
High: 22,848.25
Low: 22,594.50
Close: 22,693.00
Settlement: 22,692.75
Range: 253.75 points / 1015 ticks
Volume: 495,772
Open Interest Change: -3,122 (NQU5)
Value Area (Market Profile)
Value Area High (VAH): 22,760.00
Point of Control (POC): 22,715.00
Value Area Low (VAL): 22,650.00
Prior Session Breakdown - Market Profile and NY Session
Tuesday’s session developed into a normal variation day to the downside with a distinct “b” shaped profile, signaling long liquidation. Price opened at 22,802.25 and attempted to push higher during the first 45 minutes, briefly tagging the prior session’s POC (22,845.00) before being firmly rejected. This marked the beginning of a seller-driven session, with initiative selling picking up around 10:15am and driving price steadily down toward 22,600 — an area that aligned well with Friday’s low.
After establishing the session low at 22,594.50 in D period, price chopped in a shallow upward grind, twice attempting to reclaim the Initial Balance low but failing to hold above. Buyers did manage a firm defense near 22,640 later in the day, rejecting a retest of the low and forming a higher low into the final hour. Despite this defense, the session ended with price closing in the lower third of the day’s range — a clear sign of buyer hesitation and seller strength.
Structurally, the market showed excess at the bottom of the profile with two single TPOs in D period, while the top lacked excess, closing with a single TPO in B period — a sign that the market may revisit the 22,840 zone soon. The Value Area and POC both rotated lower, reflecting the rebalancing nature of the day.
This session looked more aggressive than it was — range came in at 253.75 points, which remains well within a typical NQ session. There was no panic in the tape, just deliberate, controlled selling and rotation after a strong upside extension on the higher timeframe.
Volume & Participation
Total Volume: 495,772 – the highest daily volume since June 23, signaling increased participation as buyers took profits and sellers pressed momentum.
Open Interest: -3,122 contracts – a sign that positions were closed rather than newly opened, which supports the long liquidation narrative.
Range: 253.75 points / 1015 ticks – a wide session, but still within the normal boundaries for NQ, especially during a controlled rotation.
The volume increase alongside declining open interest indicates profit-taking and cleanup of overly long inventory, rather than a new trend emerging. In other words, this was a digestion day — necessary and healthy in a rising market.
Final Thoughts
Tuesday’s session provided a textbook reminder that markets don’t go straight up. After extending significantly on the daily chart last week, price needed to rotate, and that’s exactly what happened. Despite the drop, there was no structural damage, and buyers showed some defense late in the session.
With excess on the lower end of the profile and none at the top, combined with the controlled nature of the selling, the door is open for a revisit of higher prices — but only if bulls show back up with conviction. As always, stay nimble and respect what the tape gives you. The market is still very much in the bulls' hands — but that doesn’t mean it’s going to be an easy ride.
Today’s Analysis – Wednesday, 7/2/25
Market Context
We head into today’s session after a healthy pullback and rotation yesterday, with the market digesting last week’s strong bullish extension. The overnight session has been flat and balanced, trading just ~40 points below yesterday’s settlement within a tight ~140-point range — well within yesterday’s range and near the the VAL. That’s a classic sign of an in-balance open, and suggests participants are waiting for more information or clarity before making directional bets.
It’s also the last full trading day of the week, with an early close Thursday and a market holiday on Friday. That means today is one of the final opportunities for institutions to get business done in a full-session window. Volume and participation will be the key signals to watch — we either get a continuation of yesterday’s rotation with follow-through and momentum, or we fall back into slow, algo-dominated chop.
From a macro perspective, news flow is light this morning. ADP payrolls come out at 8:15am, but there’s little else on the docket until tomorrow’s slew of releases. The VIX remains quiet and steady, holding just under 17 — even yesterday’s downside auction didn’t budge it, further confirming that the move was profit-taking, not panic. ES futures are flat, echoing NQ’s balanced overnight action.
Bias & Mindset
Bias: Neutral → Bullish
My bias is neutral-to-bullish heading into the session. Yesterday’s structure was clean and rotational — a sign of orderly rebalancing, not distribution. We’re still in an uptrend, and price closed yesterday well off the lows, hinting that buyers weren’t entirely absent.
That said, patience is critical today. This could go either way depending on whether there’s more business to be done or if the week is already winding down. If participation picks up early, there could be strong opportunity. If not, the best trade may be no trade. Stay adaptable and focused on what the tape is actually telling you.
Key Levels I’m Watching Today
Upside:
Note: We are trading in uncharted territory after setting a new all-time high. Levels above are based on overnight activity and psychological round numbers — expect price discovery to guide future resistance.
23,000.00 – Psychological round number (watch for responsive selling or magnet effect)
22,934.75 - Monday’s (6/30) High
22,848.25 - Yesterday’s High
22,779.75 – Overnight high
22,760.00 - Yesterday’s Value Area High (VAH)
22,715.00 – Largest high-volume node (HVN) from Yesterday’s session
Downside:
22,650.00 – Yesterday’s Value Area Low (VAL)
22,638.00 - Overnight Low
22,594.50 – Yesterday’s Low and resistance on June 27th and yesterday.
Final Thoughts on Today
This is one of those sessions where discipline will separate good trades from forced trades. Don’t let the calm tape lull you into chasing marginal setups. If volume confirms interest, look for momentum. If not, let the chop chop and protect your capital.
We’re at a pivot point on the weekly cycle — the market may just be catching its breath, or it could be preparing to launch into the next move. Either way, today will give us some important clues.
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