We knew that this news was pending and we should hear of more deals in the next few weeks.

PRE-OPEN MARKET COMMENTS THURSDAY – The trade details with the UK are still sketchy, and they agreed on a framework for a deal. The 10% tariff base is going to remain. Bessent has said publicly that they are negotiating with our largest trade partners (except China). We should expect more of these deals in the next few weeks.

Trump said yesterday that he is not going to make concessions just to meet with China. Bessent said that current tariff levels are basically a Chinese boycott. This is a clash of the titans and the US has the upper hand. China is making its own rounds and it is trying to strike trade deals that will replace US demand. The problem is that no one trusts China. Their economy is on the brink of collapse and this is one of the reasons I’m bearish longer-term.

When it comes to tariff deals, I expect many little “sugar highs” as the market tests resistance. The economic backdrop has been generally solid, but there are warning signs. Yesterday the Fed mentioned that they are seeing signs that job growth is slowing and that inflation is rising. They kept rates unchanged and I view that as hawkish. All of the other central banks are worried about slowing growth and they feel that it will ultimately lead to disinflation (some even believe that deflation is coming). They have been cutting rates and global economies have been soft relative to the US.

We’ve had major news the last five trading sessions and these were all potential bullish catalysts. Mega cap tech earnings, the jobs report and the FOMC Statement. Look at a D1 chart of the SPY and you will notice tiny little doji formations on light volume. This is not what you would expect after major news. My conclusion is that potential trade deals and a budget deal are keeping short sellers at bay. They don’t want to get caught by overnight news. Buyers are tenuous. They know that valuations are high and that the tariffs have pushed demand forward.

If the market didn’t move in the last week, it might not move much the rest of the month. We’ve gone from extreme volatility to a dead stop in the last month.

I am waiting patiently for my window to set up and I will be favoring the short side. I believe that the panic over tariffs was overblown and that trade deals will be struck. The bigger issue is global economic growth and weak economic data points in the US are coming. I like shorting at this level and I believe that the market will struggle to get back to the 200-day MA. I am not taking large short positions, just some starter swings that I can hang onto for a few months. I realize that these positions could take some heat and I am willing to weather those moves. I also realize that this bounce is fragile and that we could get a move lower at anytime.

From a day trading standpoint we are seeing compressed intraday ranges and very choppy price action. Tread cautiously. We needed the recent news to generate sustained movement and we are not getting that. The best tactic in this environment is to wait for the first move. If it is wimpy, fade it. If it is strong, wait for a pullback and try to join it. Trade either side. Don’t look for big sustained moves. Take profits when you have them.

Support is the high from Wednesday and resistance is $568.40. Much of the overnight gain has been erased.