Daily Commentary: October 23, 2025

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No Earnings Impact

Posted by Pete Stolcers on October 23
www.oneoption.com

The initial round of earnings have not moved the needle.

PRE-OPEN MARKET COMMENTS THURSDAY – Monday the market shot higher and that move lasted two hours. It was not able to advance Tuesday and profit taking drove the market right back down to where it started the week.

What does all of this mean? The price action is all driven by trading programs and long term investors are waiting for a catalyst to break us out of the trading range set on October 10th. The market is entering a seasonally bullish period and I believe the breakout will come on the upside. Asset Managers want to be long heading into year end.

Earnings season has not had much of a market impact so far, but we are just getting started. INTC will report after the close today. This is a fairly light news day. Next week we will hear from a much larger group of stocks.

The CPI will be released tomorrow and we will get an inflation read. Fed Fund Futures are pricing in a 97% chance for a 25 basis point rate cut next week. The subprime auto lender bankruptcies have lead to banks tapping the Fed’s repo facility and that is a sign of strained liquidity. Nothing too outrageous, but it is another reason for them to cut. The government shut down will weigh on economic growth and that should influence them consider two cuts this year.

There is no progress on the shutdown. If the continuing resolution is passed, it could be the catalyst that pushes the market through the all-time high.

Trade talks with China are taking place. The rhetoric on both sides has been heated, but both countries need each other. Talk is cheap and and Trump has taken a hard line and then postponed new tariffs. The initial news sparks selling and then the market rebounds. Traders are getting numb to the rhetoric and it doesn’t carry the same punch that it did six months ago.

New sanctions are being placed on Russia and the EU is joining in. Their financial system is perilously close to collapse. The war is costing a lot of money and Ukraine has destroyed many refineries. Their interest rates are at 17% and that will only worsen with the new sanctions.

Day traders can consider trading both sides as long as we are trapped in this trading range. Know that this is all program driven and that there will not be many sustained moves. We have seen some heavy selling pressure in the “high fliers” recently. Be nimble and don’t overstay your welcome.

The best strategy is to patiently wait for dips to run their course. Instead of trying to time and catch these moves lower, monitor strong stocks that have relative strength. Once support is established you can buy with confidence. If you get trapped in a long, you can hold it overnight because you have the long term trend supporting you. The same is not true for bearish day trades gone bad. It is risky to hold those overnight.

From a swing trading standpoint, I am waiting for earnings reactions. I want stocks that gap higher through all resistance and that move higher after a few days. That is a sign that the earnings were well received and that buyers are aggressive.

Support is at AVWAPQ and it was tested yesterday. Resistance is at the all-time high. Overseas markets were up slightly overnight. This is a fairly dull news cycle so a quiet day is likely. Know that the price action is program driven and that we are trapped in a range.

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