Daily Commentary: June 03, 2025

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Market Is In a Holding Pattern

Posted by Pete Stolcers on June 03
www.oneoption.com

Major economic releases will be posted this week.

PRE-OPEN MARKET COMMENTS TUESDAY – Yesterday the market gapped down to start the week and it spent the day recovering. It is trapped in a range between $575 and $595 and it is waiting for the next catalyst.

The new tariffs spooked investors early in the year and the market snapped back when they were postponed. Trump has asked that countries interested in a deal submit their plan before July 9th and that is only a month away. Trade tensions with China are escalating again and Japan said that they are not going to rush into a trade agreement just to meet a deadline. Trump will not lose face and I doubt that the tariffs will be postponed again. If deals aren’t struck by the deadline, the original tariff levels will be reinstated.

The impact of the tariffs will surface in the economic releases during the next couple of months. At this stage, the market is waiting to see what (if any) damage has been done. Retailers are reporting higher prices. Some will pass those costs along (revenues will suffer) and some plan to absorb them (lower profit margins). Yesterday DELL reported that revenues in the consumer segment are down 19% Y/Y. This could be a sign that consumers are cutting back.

From a technical standpoint, the market has been able to hold recent gains and it has stayed above major support. That is slightly bullish, but it can change in an instant. One bad headline is all it will take and the trade deadline is approaching.

This is a difficult swing trading environment and I have been focusing on day trading. There have been opportunities on the long and short side. Keep your trade size/count down until we have a breakout from this range and stick with day trading.

JOLTS will be posted after the open. Tomorrow ADP and ISM Services will be released.

Support is at SPY $575 and resistance is at $595.

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