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Morning Market Analysis 15 May 2025

Market Overview and Sentiment News

U.S. equity futures opened mixed Thursday as investors digested Wednesday’s hotter-than-expected Producer Price Index (up 0.2% MoM) and awaited revised April Retail Sales at 8:30 AM ET. Optimism from yesterday’s 90-day U.S.-China tariff truce was tempered by stronger wholesale inflation data.

  • Inflation Data: April PPI rose 0.2% MoM (vs. 0.1% expected), cooling the rally in futures after yesterday’s CPI beat.
  • Sector Performance: S&P 500 futures were down ~0.1%, Nasdaq 100 futures fell ~0.3% led by weakness in megacaps, while Russell 2000 futures outperformed near unchanged.
  • Sentiment Indicators: The VIX ticked up to 19.5 (from 18.6), indicating rising caution; the CNN Fear & Greed Index slipped to 68, exiting peak ‘Greed’ territory.
  • Earnings Update: ~92% of S&P 500 companies have reported Q1, with 78% beating EPS estimates, sustaining support in cyclical and technology sectors.

Technical Analysis Insight

Volume Profile & Order Flow Signals

  • ES (E-mini S&P 500): Volume profile shows a high volume node (HVN) at 5900 and low volume node (LVN) at 5880 from the overnight session. Price trading below HVN with aggressive sell-side delta on the 5‑minute chart indicates institutional liquidation near 5900. Watch for order flow exhaustion at LVN support for potential short-covering rallies.
  • NQ (E-mini NASDAQ 100): The overnight volume profile reveals a point of control (POC) at 21400. Price has repeatedly rejected POC with heavy sell market orders, confirmed by negative cumulative delta. This aligns with foundational weakness in tech earnings guidance and elevated PPI prints—favor continuation of downside until new value areas form.
  • YM (E-mini Dow): Balanced auction profile between 41900–42100, with visible auctions at 42000. Neutral order flow within this range suggests range-bound behavior. News-driven catalysts (retail sales, jobless claims) may drive imbalances—trade spikes beyond LVN/HVN levels on breakout volume.
  • RTY (E-mini Russell 2000): Thin volume profile below 2090 LVN signals low liquidity zone; aggressive market sell orders on the break below LVN confirm momentum. Look for rapid intraday moves through the next HVN at 2075, using cumulative delta divergences to time entries.

Integration with Events & Foundational Analysis: The heavier PPI print has amplified selling pressure in ES/NQ via aggressive order flow. Combined with upward revision in retail sales, cyclical names in RTY may see countertrend bounces at LVNs. Use technical levels in concert with event windows (e.g., Retail Sales release) to filter false breakouts.

Foundational Analysis

  • Wholesale Inflation (PPI): April PPI rose 0.2% MoM (vs. 0.1% expected).
    • Bull Case: A downtrend in core PPI would ease input-cost pressures, bolstering corporate margins and supporting risk assets.
    • Bear Case: Sticky wholesale inflation could feed into consumer prices, forcing the Fed to maintain hawkish policy, weighing on equities.
  • Consumer Spending (Retail Sales): April retail sales revised to +0.6% MoM.
    • Bull Case: Strong discretionary purchases signal resilient consumer confidence and underwrite further GDP gains.
    • Bear Case: Rising interest rates and sentiment fatigue may curb spending ahead, risking slower growth in consumer-driven sectors.
  • GDP Outlook: Q1 GDP growth revised from -0.3% to -0.1%.
    • Bull Case: Near-neutral revision suggests the downturn may be shallow, potentially setting the stage for a modest rebound.
    • Bear Case: Continued below-trend growth and elevated imports could drag on domestic production and corporate earnings.
  • Services PMI: April Services PMI steady at 51.6.
    • Bull Case: Ongoing expansion in services supports labor markets and consumer spending, reinforcing equity valuations.
    • Bear Case: Rising Input Costs Index may squeeze profit margins and slow hiring, dampening sector strength.
  • Manufacturing PMI: April Manufacturing PMI ticked up to 49.2.
    • Bull Case: Improvement toward 50 hints at stabilization, which could eventually spill over to broader economic activity.
    • Bear Case: Persistent sub-50 reading signals contraction in factory orders, risking spillover into employment and capex.

Overall Trend: The macro backdrop is mixed—services-led growth contrasts with manufacturing weakness, and resilient spending clashes with inflationary pressures. Monitoring central bank signals and upcoming data will be critical for gauging the next directional move in equities.

Upcoming Economic and Trading Events

  • Thursday, May 15 — U.S. Retail Sales (Apr MoM): 8:30 AM ET; upside surprise (bullish), downside miss (bearish).
  • Thursday, May 15 — Initial Jobless Claims: 8:30 AM ET; readings below 230K (bullish), above 235K (bearish).
  • Thursday, May 15 — Univ. of Michigan Consumer Sentiment (Prelim): 10:00 AM ET; beat (bullish), miss (bearish).
  • Friday, May 16 — Housing Starts & Building Permits (Apr): 8:30 AM ET; stronger than consensus (bullish), weaker (bearish).
  • Friday, May 16 — Industrial Production & Capacity Utilization (Apr): 9:15 AM ET; strong print (bullish), weak (bearish).

Key data releases slated within the next two sessions; scalpers should avoid trading during the 5-minute windows before and after each release.

Strategy for Scalpers

Order Flow & Volume Profile Tactics

  • Order Flow Confirmation: Enter trades only when aggressive market orders confirm direction. For shorts in ES/NQ: look for price retests of HVNs (5900, 21400) on rising sell delta. For longs in RTY: watch for delta divergences at LVN supports.
  • Volume Profile Levels: Use overnight HVNs/LVNs as primary target and stop zones. Scale into positions at LVN dips for mean-reversion scalps and scale out at nearby HVNs to capture liquidity pockets.
  • Event-Aware Scaling: Ahead of Retail Sales and Jobless Claims, reduce position sizing by 50% at HVNs to mitigate risk, then re-enter on order flow breakouts with full size once the post-release micro-range is established.
  • Risk & Size via ATR: Calculate 1‑minute ATR and set stop at 0.5× ATR; take profit at 1× ATR for optimal scalping R:R, adjusting size based on order flow intensity.
  • News-Driven Liquidity Influx: Capitalize on spikes in volume profile around economic releases by hunting fast fills at temporary LVNs; use aggressive limit orders at profile gaps.
  • Adaptive Bias: Align scalp direction with foundational signals—bearish for ES/NQ post-PPI, neutral/range for YM, and opportunistic bounces for RTY on consumer spending strength.
  • Use a Virtual Private Server: with QuantVPS, you can execute trades with a 1ms latency. Sign up here!

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