Daily Commentary: August 18, 2025

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Next Market Catalyst

Posted by Pete Stolcers on August 18
www.oneoption.com

This Friday Powell will speak at the Jackson Hole conference.

PRE-OPEN MARKET COMMENTS MONDAY – There weren’t any major developments over the weekend and the S&P 500 is flat overnight. International markets were down slightly.

The big news from last week was the hot PPI reading of .9%. Price increases were broad based and even the core came in at .9%. It is going to take 1-2 months for this to bear out in consumer prices and we should expect a hot CPI in the future.

The Fed has been concerned about future inflation and Friday we will learn to what degree the PPI will influence their decision in September. Fed Funds Futures are pricing in a 100% chance for a 25 basis point rate cut. Any hint that they might wait another month will not be well received by the market.

Wednesday afternoon the FOMC minutes will be released, but the comments won’t reflect the latest inflation reading so they are not likely to provide any clarity.

Flash PMIs have been soft and they are not likely to move the needle. The market has largely ignored a global slowdown.

Remarks from the Trump/Putin meeting in Alaska have generally been positive. That means that for the time being addition sanctions on Russia are on hold. Countries buying oil from Russia (China and India) won’t see tariffs increased this week. The trade deal with China was extended last week.

Given all of the releases this week, Jackson Hole is the only thing that could spark a move one way or the other. A rate cut is expected so surprise favors the downside.

The market has been treading water at the all-time high. The intraday trading ranges have been tight and the price action has been choppy. I expect this pattern to continue.

Our best set-up is and early probe for support. This selling pressure gives us time to find the strongest stocks and when the market finds support we can buy them. Don’t expect nice sustained bounces. The volume is light and we are in hit and run mode.

Support is at $642.50. That was the previous market high and that level was tested last week. We’ve had a few touches there and if that level is breached, we are likely to trigger sell stops. That will create additional selling pressure. Resistance is at $646 and that level has also been touched a couple of times. In all likelihood the market will stay in that trading range until Friday.

This is a time to really focus on your stock selection. Find stocks that have news, heavy volume and technical breakouts/breakdowns. The stock will have to do all of the heavy lifting and the market won’t help or hinder much. You only need a few of these stocks and one good trade can make your day. Narrow your focus and time your entry and exit. This is your best set-up to make money.

Keep your size and your trade count low.

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