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Bull Scenario for U.S. Stock Market (June–August 2025)

Caesar Market Analysis: Bull Case Outlook and Trading Recommendations

By The Humble Servant, May 31, 2025  

Bull Scenario Overview

The bull scenario assumes favorable conditions drive U.S. stock indices to break above recent resistance levels (DJIA: 42,876, SPX: 6,088, NDX: 21,610, RUS: 2,116) and sustain upward momentum through June–August 2025. This scenario has a 25% probability based on current technicals, market dynamics, and potential catalysts. Below is the detailed bull case, including key drivers, target levels, and trading recommendations for June 2, 2025, and beyond.

Key Drivers for Bull Scenario

Strong Tech Earnings: Blockbuster earnings from tech leaders (e.g., Nvidia, Microsoft) fuel bullish sentiment, particularly for NDX and SPX.  

Federal Reserve Policy: Signals of additional rate cuts or dovish guidance boost risk appetite, supporting equities.  

Tariff Relief: De-escalation of trade tensions or clarity on tariff policies reduces uncertainty, benefiting small-cap (RUS) and industrial (DJIA) stocks.  

Economic Data: Robust jobs data (due June 6, 2025) or consumer spending figures signal economic resilience, encouraging investment.  

VIX Decline: VIX falls below 18, reflecting low volatility and investor confidence, supporting a sustained rally.  

Technical Breakout: Indices clear resistance with strong momentum (e.g., RSI < 70, stochastic K/D rising), confirming bullish trend continuation.

Market Snapshot (May 30, 2025, Close) – Bullish Context

Using the provided May 30, 2025, close data, the bull scenario builds on current technicals:  

DJIA: Close 42,270 | RSI: 56.6 (neutral, room to rise) | Momentum: 105.4 (bullish) | Price > EMA 50 (41.61).  

SPX: Close 5,911.69 | RSI: 61.3 (slightly overbought but sustainable) | Momentum: 107 (bullish) | Price > EMA 50 (5.72).  

NDX: Close 21,340.99 | RSI: 64 (overbought but trending) | Momentum: 109.8 (bullish) | Price > EMA 50 (20.31).  

RUS: Close 2,066.29 | RSI: 56.2 (neutral, room to rise) | Momentum: 105.6 (bullish) | Price > EMA 50 (2.04).  

VIX: Close 18.57 | RSI: 41.36 (neutral) | Stochastic K: 25.62, D: 22.63 (oversold, supports VIX decline).

Bullish Signals:  

Prices above EMA 50 across indices confirm uptrend.  

Neutral RSI (DJIA, RUS) allows room for gains without immediate overbought concerns.  

VIX at 18.57 with oversold stochastic suggests potential drop to 15–18, favoring equities.  

High volume (SPX: 4,812.5B) indicates strong participation, supporting breakout potential.

Bull Scenario Targets and Levels (June–August 2025)

Under the bull scenario, indices break above resistance and target new highs:  

DJIA:  

Current: ~42,200–42,300 (June 2 open estimate).  

Target: 43,500 (+3.1% from current, +2.8% from May 30 close).  

Resistance: 42,876 (initial), 43,500 (new high).  

Support: 42,200 (primary), 41,900 (secondary).

SPX:  

Current: ~5,900–5,950.  

Target: 6,200 (+5.1% from current, +4.9% from May 30 close).  

Resistance: 6,088 (initial), 6,200 (new high).  

Support: 5,900 (primary), 5,850 (secondary).

NDX:  

Current: ~21,300–21,400.  

Target: 22,000 (+3.3% from current, +3.1% from May 30 close).  

Resistance: 21,610 (initial), 22,000 (new high).  

Support: 21,300 (primary), 20,800 (secondary).

RUS:  

Current: ~2,060–2,070.  

Target: 2,150 (+4.1% from current, +4.0% from May 30 close).  

Resistance: 2,116 (initial), 2,150 (new high).  

Support: 2,060 (primary), 2,000 (secondary).

VIX:  

Current: ~18–20.  

Target: 15–16 (–16% to –20% from current, bullish for equities).  

Support: 15 (floor); Resistance: 20 (ceiling).

Likely Outcomes Under Bull Scenario

Market Action: Indices break resistance (DJIA: 42,876, SPX: 6,088) by mid-June, driven by tech earnings and Fed signals. Momentum carries markets to new highs (DJIA: 43,500, SPX: 6,200) by August, with VIX dropping to 15–16.  

Sector Leadership: Technology (NDX) and small-caps (RUS) lead, with financials and industrials (DJIA) also gaining on rate cut optimism.  

Risks to Bull Case:  

Unexpected weak jobs data (June 6, 2025) or tariff escalation could cap gains.  

Overbought conditions (RSI > 70) may trigger short-term pullbacks to support.

Confirmation Signals:  

VIX < 18 and declining.  

Positive A/D (reduced selling pressure vs. May 30: SPX –7,742.7B).  

Breakout above resistance with high volume and rising momentum.

Trading Recommendations for Bull Scenario (June 2, 2025)

Assuming the bull scenario unfolds, prioritize long positions at current levels or on dips to support, targeting new highs. Recommendations are tailored for the June 2 open and short-term (June–August 2025) horizon.

DJIA (~42,200)

Long: Buy at ~42,200 or on dip to 42,200; target 43,500 (+3.1%, ~$310/point). Stop: 41,900 (–0.7%).  

Alternative: Add on breakout above 42,876; target 43,500. Stop: 42,200.  

Rationale: Neutral RSI (56.6) and price above EMA 50 (41.61) support a breakout. Moderate volume (801.7M) suggests room for increased participation.

SPX (~5,900)

Long: Buy at ~5,900 or on dip to 5,900; target 6,200 (+5.1%, ~$150/point). Stop: 5,850 (–0.8%).  

Alternative: Add on breakout above 6,088; target 6,200. Stop: 5,900.  

Rationale: RSI (61.3) and bullish momentum (107) support gains. High volume (4,812.5B) indicates strong buying interest, despite negative A/D.

NDX (~21,300)

Long: Buy at ~21,300 or on dip to 21,300; target 22,000 (+3.3%, ~$140/point). Stop: 20,800 (–2.3%).  

Alternative: Add on breakout above 21,610; target 22,000. Stop: 21,300.  

Rationale: Overbought RSI (64) is sustainable in a tech-driven rally. Bullish PSAR (18.04) and momentum (109.8) favor longs.

RUS (~2,060)

Long: Buy at ~2,060 or on dip to 2,060; target 2,150 (+4.1%, ~$180/point). Stop: 2,000 (–2.9%).  

Alternative: Add on breakout above 2,116; target 2,150. Stop: 2,060.  

Rationale: Neutral RSI (56.2) and price above EMA 50 (2.04) support small-cap outperformance on tariff relief or economic strength.

VIX (~18–20)

Avoid Longs: Do not buy VIX calls in bull scenario, as VIX is expected to drop to 15–16.  

Alternative: Consider VIX puts (strike ~16, expiry July 2025) if VIX < 18 to capitalize on declining volatility. Stop: VIX > 20.  

Rationale: Oversold stochastic (K: 25.62) and VIX at 18.57 suggest a decline, supporting equity gains.

Stocks

Buy:  

Microsoft (~$400): Strong earnings and cloud/AI growth. Target: $440 (+10%).  

Nvidia (~$120): AI and semiconductor leadership. Target: $140 (+16.7%).  

JPMorgan (~$200): Benefits from rate cut optimism. Target: $220 (+10%).

Hold: Apple (~$220) for stability, but avoid adding due to slower growth.  

Avoid: Tesla (volatile, tariff-sensitive).

Risk Management for Bull Scenario

Position Sizing: Longs: 15–20% of portfolio to capitalize on upside. Avoid shorts in bull scenario.  

Hedging: Minimal hedging needed; consider SPX puts (strike ~5,850) for unexpected pullbacks.  

Stops:  

DJIA: 41,900  

SPX: 5,850  

NDX: 20,800  

RUS: 2,000

Monitor:  

VIX (<18 bullish, >20 caution).  

Jobs data (June 6, 2025).  

Tech earnings and Fed statements.  

Breakout volume and A/D improvement.

Conclusion

The bull scenario (25% probability) envisions U.S. stock indices breaking above resistance (DJIA: 42,876, SPX: 6,088) and rallying to new highs (DJIA: 43,500, SPX: 6,200, NDX: 22,000, RUS: 2,150) by August 2025, driven by strong tech earnings, Fed rate cuts, and tariff relief. For June 2, 2025, buy at current levels (DJIA: 42,200, SPX: 5,900) or on dips to support, targeting new highs with tight stops. Focus on tech (Microsoft, Nvidia) and financials (JPMorgan). Monitor VIX (<18) and jobs data for confirmation.