September 8, 2025

(A WEAK LABOUR MARKET ALMOST GUARANTEES A RATE CUT)

September 8, 2025

Hello everyone

WEEK AHEAD CALENDAR

Monday, September 8

3:00 p.m. Consumer Credit (July)

8:30 p.m. Australia Consumer Confidence

Previous: 5.7%

Forecast: 1.0%

Tuesday, September 9

6:00 a.m. NFIB Small Business Index (August)

Earnings: Synopsys, Oracle

Wednesday, September 10

8:30 a.m. Producer Price Index (August)

Previous: 0.9%

Forecast: 0.3%

10:00 a.m. Wholesale Inventories final (July)

Earnings: Adobe

Thursday, September 11

8:30 a.m. Consumer Price Index (August)

Previous: 2.7%

Forecast: 2.9%

8:30 a.m. Initial Claims (09/06)

Earnings: Kroger

Friday, September 12

10:00 a.m. Michigan Sentiment preliminary (September)

Previous: 58.2

Forecast: 59.2

THE FED RATE CUT MAY BE IN THE BAG

This week, the markets will be digesting the jobs data from last week. The labour market landscape is cracking, and a firm downtrend seems to be well and truly in place. Maybe that means good news when it comes to the Fed meeting next week. Some are even betting on a larger rate cut with a 10% chance of a 50bps move; however, the consensus is that traders are betting on three 25bps cuts by December – essentially a cut at every meeting.

But nothing is certain until it happens. There is always an outside possibility that the Fed will not cut rates at all. I believe that would cause a temporary temperamental tantrum in the markets if that were the outcome from the Fed.

The language describing the economy is not dramatic. I am noting the repeated use of a slowing economy, rather than a recession.

Last week, Evercore ISI’s Julian Emanuel put out a target of 7,750 on the S&P500 in 2026. The growth story in AI is underpinning that target, and he is optimistic that all retracements should be bought in the current market.

The August CPI is due out on Thursday and is expected to show a year-over-year rise to 2.9% from 2.7%, according to FactSet consensus estimates.

Excluding volatile food and energy prices, CPI is expected to have held steady at 0.3% and 3.1% on a monthly and yearly basis, respectively.

However, August producer prices are set to have cooled. Economists expect PPI to have risen 0.3% month over month, down from a 0.9% gain in July.

ORACLE REPORTS THIS WEEK

Oracle is due to report earnings after the closing bell on September 9. There are many analysts that are bullish about the future performance of this stock, seeing it as a long-term beneficiary of AI adoption.

Cantor Fitzgerald rates Oracle at Outperform with a $271 price target, while Guggenheim has a Buy rating with a $250 price target.

Mizuho Financial Group sees Oracle, along with Broadcom, as top picks for September 2025, and rates Oracle at Outperform with a $300 price target.

The cloud computing company posted solid earnings and revenue in its fiscal fourth quarter and issued upbeat guidance, including growth targets that a few analysts described as “stunning.

We wait and watch. Keep stops in place.

As I am writing this Post, I can see the Futures are up, and Oracle is showing a print of $238.50 in Ext. hours. If Oracle rallies to $240 and beyond today (or tonight, if you are in Australia), take profits if you entered any of the option trades I offered on August 23. If you bought the shares, hold.

Oracle option trades offered on August 23

235/240 bull call spread at $2.69 or best. Expiry: Sept. 26

237.50/240 bull call spread at $1.20 or best. Expiry: Sept 19

240/245 bull call spread at $2.33 or best. Expiry: Sept. 26

MARKET UPDATE

S&P500

Last Friday, the index rejected the slight new high at 6533. It quickly reversed, showing signs of slowing momentum; however, there is still no confirmation that a top is in place “pattern-wise.”

Resistance: 6533/40 area

Support: 6440/50 and 6375/85 –

GOLD

After breaking the key $3490/00 area, gold hit all-time highs at $3600 ~. It’s a bullish big picture sign, but the market is very overbought short term, so we may see a couple of weeks of consolidation.

Resistance: just above the recent $3600 high -> $3620 area.

Support: $3490/00 area

BITCOIN

The big picture is bearish with a top for at least a few weeks/months remaining in place. The choppy behaviour is seen as a correction. There is still scope for Bitcoin to extend its gain to around the 128K area before a longer-term decline takes place.

Resistance: 113.3/113.8k and 115/116k area

Support: 109.3/109.8 and 107.7k

ON MY RADAR

Chewy (CHWY: $42.33) is showing a very good technical setup. On the weekly chart, it is showing bullish divergence and a pin bar (hammer candle), highlighted on the chart, which is a bullish signal. Additionally, the OBV, which is a leading indicator, is pointing higher. In other words, this means the stock could rally higher in the near to medium term. I have also included the Fibonacci extension levels to show you what levels the stock could target. Most notably, keep in mind the 0.236, the 0.382, and the 0.618 Fibs. I have not worked out any option trades yet, but if you were interested in placing a trade, you could think about an in the money bull call spread trade below the pin bar, or just out of the money – just above the price. I would go out for two to three months and take profits before expiration. (Some of you will think I am crazy for even researching possible trades to offer when we have the Fed meeting next week, but I offer it because of what I see in my technical analysis and because the overall market is still showing that bullish market structure has not been broken. And the fact that a rate cut is almost guaranteed next week. I believe we could see this bullish move continue until towards the end of the year. Then, we could see a strong retracement that may cut some weak hands from the market. But we will not see the lows we saw early in the year.