The news is fluid and the market is reacting to every release.

PRE-OPEN MARKET COMMENTS MONDAY – The market cares more about the latest tariff news than it does anything else. Each country will go through its own negotiations and trade restrictions will also be addressed. I believe we will see the first “trade deal” in the next two weeks and that will set the framework for the rest. There are almost 100 countries that want to negotiate so this will take months to play out. Most analysts agree that Japan and South Korea will be two of the first to strike an agreement.

Cell phones and computers will be handled separately and this afternoon we might have more clarity on semi conductor chips. These imports are an important part of our economy and they need to be handled with care. Trump’s goal is to move that production to the US so there is likely to be a timeline associated with any temporary relief. The fact that there is latitude and room for special considerations has global markets breathing a little easier this morning.

Last week we learned that inflation is starting to ease. The Fed’s fear is that tariffs will cause a spike in prices so even though the trend is lower, they are not going to ease. I do believe that the tariffs could cause supply disruptions. Containers are stacking up in China and exports have come to a grinding halt while the tariffs are being determined.

Global economic conditions have been deteriorating for over a year and that is a much greater threat. The tariffs are adding to that uncertainty. China is perilously close to a credit crisis and a huge reduction in exports could push them over the edge. Currencies and bonds have been very volatile and that is a major warning sign. Credit levels across the globe are at extreme levels and risk is elevated.

The Senate will vote on the “Big Beautiful Bill” and that will extend the tax cuts and add new tax cuts. I suspect that the market reaction will be positive. The tax cuts need to be commensurate with spending cuts.

Earnings season will feature banks this week and the reaction so far has been positive. Bad loan right downs are in line with expectations. We will get a much broader view next week when more companies release earnings. I believe that any guidance will be very guarded and that only adds to the current uncertainty.

This is a holiday shortened week and I believe some of the volatility will start to subside.

Swing traders should focus on selling OTM put premium on strong stocks. Distance yourself from the action and let this “dead spot” work in your favor as time decay and an IV crush work in your favor. I am not bullish, but I feel that the odds of a big market drop in the next two weeks is negligible. I believe the market will struggle to get through SPY $550 and that this bounce will ultimately set up a very nice bearish swing trading window. We need option IVs to decline and this waiting period will provide that.

Day traders should go with the flow. I believe the first move will be wimpy. There is no substance behind the gap up this morning. We still don’t have any details, only that news is pending. If the first move fills in some of the gap, we want it to be brief and shallow. When the market finds support, take long positions and focus on tech. If the first move is a wimpy grind higher, watch for signs of resistance. The downside will be tested and that is when you can try some shorts.

Support is at the high from Friday ($536.43) and resistance is at the high from Wednesday ($548.62).