Daily Commentary: June 09, 2025

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Better Than Feared

Posted by Pete Stolcers on June 09
www.oneoption.com

The recent market momentum will continue during a light news cycle.

PRE-OPEN MARKET COMMENTS MONDAY – Last week the jobs report came in better than feared and the S&P 500 rallied on the news. The downward revisions the prior two months (95K) were discounted and the gains held throughout the day. This morning the action is fairly dull and European banks are closed for holiday. I suspect that the high from Friday will be challenged.

As I look ahead, there are a few possible upside catalysts. US/China trade talks are taking place in London. China produces 95% of the world’s supply of rare earth minerals and they are using that as leverage. If a deal isn’t reached soon, there will be supply disruptions and they will impact the tech sector.

The “big beautiful bill” is a top priority for Republicans and any progress will keep buyers engaged. The bill included major tax cuts for individuals and corporations and that is a form of stimulus.

The major economic releases this week are CPI and PPI. I believe inflation will continue to subside and China has been in a deflationary cycle. That is dangerous because consumers postpone purchases and that results in economic contraction. China has been cutting interest rates to stimulate economic growth to no avail.

Last week the ECB cut interest rates for the 8th time in the last year. When they started easing, they believed that it would be very gradual. The central bank is worried about economic growth. The FOMC will meet next week and Powell has been hawkish.

The technicals are bullish and the fundamentals are bearish. Normally, I am able to discount fundamentals and just trade technicals. In this case, the news is dire and I am not able to make that separation. That means my level of confidence is low and that I have to trim my trade size and trade count. You are not always going to have a high level of confidence.

I’m going to focus on day trading until I have the confidence I need to take swing trades.

Support is at the low from Friday and resistance is the high from Friday.

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