GAME PLAN REVEALEDGAME PLAN REVEALED: Fed Cuts, Small Caps Breakout, and Key Technical Levels: 06/05/2025

In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, unpacked fresh economic data, shifting Fed rate‐cut expectations, a compelling small‐cap setup, and key technical levels in stocks, commodities, and crypto. Today’s article dives deeper—providing historical context, technical clarity, and actionable levels for traders navigating this evolving landscape.

1. Economic Data: Early Signs of Softening

Yesterday’s ADP report shocked expectations with just 37,000 private‐sector hires, and this morning initial jobless claims rose to 247,000 from last week’s 239,000—and well above the 220,000 plateau of prior weeks. Meanwhile, the services PMI showed contraction.

“247,000 historically is not big… until you get to about 300,000—but it’s the trend change that I’m watching here.”

Why it matters: Jobless claims and PMI are leading indicators of labor‐market health and consumer spending. While 247,000 claims aren’t a recession flag alone, the upward trend—coupled with services contraction—signals the Fed’s “data‐dependent” policy path may soon pivot.

2. Fed Rate Cut Expectations and Market Reaction

In response to weaker ADP, rising claims, and the ECB’s 25-bp cut, markets swiftly repriced Fed policy. VerifiedInvesting’s Fed Watch tool now shows a September rate cut as the consensus—its first mention for U.S. easing.

“Look at this… the markets popped initially on the expectation that the Fed will be cutting rates as early as September.”

Yet stocks gave back some gains as traders questioned whether cheaper credit—while supportive for asset prices—heralds slower growth and lower corporate earnings.

3. Small Caps in the Spotlight: Russell 2000 Setup

Small caps have lagged amid higher yields, but the IWM (Russell 2000 ETF) is carving a textbook inverse head-and-shoulders pattern with a neckline near 209.50.

“Lower rates for small caps is a lifeline… with yields set to fall, this could trigger a big move up.”

Measured‐move target: Subtract the low-to-neckline distance from breakout, projecting a potential rally into the mid-220s on IWM. A weekly close above 209.50 would confirm the breakout and open the door to that target.

4. Stocks to Watch: Technical Levels and Trade Ideas

MongoDB (MDB): Post-Earnings Surge

MDB rocketed nearly 20% on after-hours earnings, fulfilling the inverse head-and-shoulders call published at around 193.75.
“Don’t trust me—prove it to yourself 10, 50, 100 times.”

Key levels:
– First resistance ~240 (pivot low)
– Gap‐fill zone near 265 (swing-trade target)

Traders can look to short rallies into 240 for day trades, or play a pullback if momentum fades.

Ford (F): Gap-Fill Resistance

F topped out at a 133 gap fill and drifted lower pre-market. Next resistance at 140 aligns with a multi-point trend line.
– Short into 140 for a quick scalp

PVH Corp.: Day-Trade Bounces

Down sharply on tariff fears, PVH’s chart shows pivot‐low support at 67. A bounce here could offer a 1R day trade.
– Watch for a double-bottom and quick reversal off 67

Broadcom (AVGO): Price Discovery Zone

Fresh all-time highs post-earnings leave AVGO in “price discovery.” A trend‐line from the 2023 peak crosses near 295—an area to monitor for exhaustion.
– Overbought conditions argue for caution; a failed breakout near 295 could mark a top

5. Commodities & Crypto: Patterns and Probabilities

Bitcoin: Bear Flag Underway

BTC is tracing a bearish channel after topping—its classic bear flag. “If it doesn’t pop soon, it will likely fall to the wayside.” A break above the flag could reignite the rally; a break below support would signal deeper correction.

Gold & Silver: Divergent Strength

Gold broke out of a bullish wedge over the weekend and is consolidating near highs. Silver is “rocking,” trading above key resistance and rewarding long SLV positions.

Palladium: Retrace to the Scene

Palladium’s breakout and retrace to former resistance (“scene of the crime”) sets up another leg higher. “Charts like to revisit their home.”

Oil & Natural Gas: Watch the Crime Scene

Oil is edging back to its breakout zone—ripe for a short if it fails again. Natural gas inches toward resistance, with support well defined—ideal for range traders.

Conclusion: Eyes on Tomorrow’s NFP

Today’s mix of softer labor data, renewed Fed-cut bets, small-cap technicals, and high-conviction stock and commodity setups offers a roadmap for active traders. Keep tomorrow’s nonfarm payrolls in focus—another potential catalyst for rate expectations and market direction. By sticking to clear technical levels and probability-based thinking, traders can navigate volatility with confidence.