Transcription
My name is Gareth Soloway and I was a losing trader until I mastered technical analysis. Logic and charts be hype and narratives every time. Now I teach investors the same techniques that made me a multi-millionaire. This is my trading game plan.
Hey everybody, welcome to my trading game plan. Of course, I am Gareth Soloway, chief market strategist here at verifiedinvesting.com. And today folks, we got to talk about gold. Gold ripping up above $5600 per ounce. And I think the moral of this story, if there is one, is that it tells us something about how the world views the US financial system and now citizens around the world, including the United States.
Now, when I bought gold back in 2019, 2017, etc., it was kind of one of those things where it was a security blanket. It was an insurance policy just because I saw what was going on with the spending of the money and the running up of the debt. Now it's come to fruition. And it's not to say gold won't have a pullback, and it will have significant pullbacks, but there's a new dynamic here where again, we're seeing overall the loss in faith in the financial system is reaching a level that is unprecedented. And that's something that we have to take note of as citizens. And they need to get their their you know what's in order in the political world, right? Get this stuff under under, you know, control.
Now listen, this isn't a show about these type of things generally. I focus on charts, but obviously we'll look at the chart of gold in just a second and see where it goes. But I did want to make that point folks. I mean, think about what it says about the US financial system, the global fiat system overall.
Now let's jump into the charts. The S&P 500 is fractionally higher today. If we look at where we closed yesterday, we closed right around 7,000 or so and we're trading around 7,200. So, you're looking at a 20 to 25 point gap up in the S&P 500. Now, checking in on the bigger time frames and we'll get back to gold. Don't worry, we're going to look at the chart and try to decipher what is going on there. But here is your chart of the S&P 500 daily. And what we could see again is we have our same parallel that goes back five years to the COVID lows, right? And it measures perfectly the top of the bull market in 2021, the bare market in 2022 where we kind of hopped along that baseline. Then we pushed up and had the liberation selloff low. And then look at this. We came right up and we hit that line. We have yet to actually hit that line again. Even though the S&P has made slightly higher highs because this is an inclining or ascending trend line, we have not hit that again.
That brings us to the white trend line. The white trend line, we remember we broke below it and we've come up underneath it. And what I said yesterday is extremely important again today. This zone right here is the big thing to watch. Are we going to get through this? Are we going to get through these two levels or are we going to see a rejection? If we get rejected here, folks, I think the market runs out of steam. I mean, think about the buying frenzy that's going on in so many assets out there. I mean, everything but Bitcoin basically is at all-time highs, right? And so, you look at this area and you have to say, if you want to continue that zeal, that excitement for buying the market, that psychological greed, you got to take this level out. You got to get the S&P into essentially price discovery mode where it's above these levels. If that happens, then sure, we'll see more leverage taken, more buying coming in, all of these factors. If it can't, that's where I do think you start to see a much bigger correction where we actually could see upwards of 10 to 20% downside. And I think it would be fast and furious.
Now, you might be saying, well, what's going to be the culprit for that? What's the what's the narrative that's going to be spun to trigger that type of sell-off? Well, I think we're seeing it a little bit with Microsoft today. Microsoft here, folks, is trading down sharply and they're running into the same issues that Oracle ran into. They're spending a ton of money and they're getting at this point minimal returns and the markets are starting to question that.
Now, listen, in the case, and we'll go back to the levels and trading levels on these. In the case of Meta, Meta is spending $135 billion over the next six months. All right. Now, listen. One thing to note here, and I've said this before, I've preached it to you guys. We've seen GDP levels that have been remarkable. Like to the point where you and I were like, where the heck is this economic growth? Because I'm certainly not seeing it, right? The average person is not seeing it. When you hear Meta, one company alone spending in six months, $135 billion. Now, it makes sense. That's where the GDP growth is coming from in the economy, from the AI capex spend, which is what I've preached to you guys over the last few months. That's where the growth is in the economy. Everything else in the economy is stagnant. Stagnant. Now, it's not really getting worse at this point, at least for a majority of people, but it's also not getting better. The jobs market, the labor market is flat, right? We're seeing basically no growth there. Granted, we're not seeing massive layoffs as well, but the capex here in this environment in the in the AI space is astronomical and it is literally keeping the GDP numbers up from being negative or at least flat.
All right, so let's go back into this. So we have Meta pushing up beautifully, almost up 10% on the day. Now listen, if we go to the daily chart on Meta, take a look at this, right? So, we had this long-term trend line, and I still remember highlighting this to you guys in a former game plan a couple weeks ago as we were coming into support. We talked about would it break or would it bounce? And it did bounce. It bounced beautifully. We talked about if it rallies on earnings, there's a major gap fill at this 750-51 level. That, my friends, is my short level for the day. So there's my first trading opportunity I'm revealing to you right here. If Meta can push up into this gap fill, that would warrant a fade in price at least probabilitywise. So that's your first level to watch on Meta.
Now we'll go to Microsoft, but we'll handle most of the earnings after. I still want to get back to the NASDAQ, the dollar chart, because the dollar is really also at the crux of what's going on with gold in my opinion. So here we have Microsoft. They're spending a ton of money too. So add another hundred plus billion dollars into the mix along with Meta. Um, but they're not seeing the return. Their Azure cloud group did not or their cloud, you know, service did not grow as much as anticipated. So the stock is tanking a little bit today, down about six to 7% pre-market. Now, for a company that is valued, if we go down here, we can see $3.5 trillion in valuation, that is a huge hit to the NASDAQ. But again, then you offset it with Meta, which is about a $1.7 trillion company. And it's really not that big of an off, like like it's not like Meta's driving the NASDAQ down sharply today because you're getting the offset of um Meta here, Microsoft, I should say, um driving the markets down.
All right. So, here we have a daily chart of Microsoft. So, where is the tradable level? Well, the first level is the obvious one, right? And this is again strictly day trading. This 438.75 double bottom. That's just a classic double bottom there. It's nothing fancy there. It's just literally the former pivot low. You can see we're above that level. If we were to flush another $10 from current levels on Meta, uh, excuse me, on Microsoft, then likely we would get into it. Now, if that breaks, then we have what's called gap window. Gap window would be your next big spot. This would be a very significant, if we were to sell all the way down here, number one, I would assume the NASDAQ would be negative pretty sharply on the day because that would be such a big drop on Microsoft, but this would be a very good level.
Now, what about a swing trade? For all of you out there that aren't day traders and you're saying to me, well, you know, it's nice to hear about the levels and learn and be educated on how to find levels, which is why I go over these, but let's be fair, most of you guys are probably not day traders. So, the swing trade level, where would I be looking to buy Microsoft based on technicals on a swing trade? The gap fill right here, folks. 395. See this massive gap fill gap right here. So from this date to this date right there, that if we come down in the next few days to week or so, this here gives me a good starting point to expect a technical bounce on Microsoft. All right, so keep your eyes on that one guys. That is a big one there on a swing trade basis.
And then I just want to show this last factor here. I think this is really, really important. Take this low, connect it all the way through here. All right. Or you could take this low and connect it through here. But look at how many support levels are right there or below. So when you look for a swing trade and and generally a day trade as well, one factor is good. One factor gets you 60%, 65% probabilities. Two factors you're probably at 70 to 75%. Three factors 75, 80%. Now, I'm always hesitant to say you can get above 80% chance of success because again, markets can do irrational things, but ultimately the more factors the better if you can find them. All right, so that's your Microsoft chart.
Now, just flipping back, we looked at the S&P. Remember, we looked at the S&P daily chart. We're right in here. Let's see what happens today. Remember, Apple reports after the bell. By the way, folks, I didn't even discuss the Federal Reserve right from yesterday. Now, why didn't Gareth bring up the Federal Reserve? And frankly, it's because it was literally a non-event. Jerome Powell, they didn't do anything with interest rates. He basically said the labor market stabilizing. Uh, he basically alluded that they weren't going to cut rates. Um, but he's out of his position in May. That's what the market had already priced in. And if you looked at the S&P yesterday, there was almost no movement. We got a little gyration in the S&P with the Jerome Powell press conference, but he did not unveil anything new. Nothing new. He wouldn't talk about the president. He wouldn't talk about anything past what he's doing right now. And so that's why, honestly, I didn't bring it up. Now, obviously, I did, but just to fill you in on why I'm not spending a lot of time discussing it.
All right, onto the charts we go. The dollar, the dollar did get a bounce yesterday. It is down again today. This continues to be my biggest concern overall for the markets. Now, you might say, "Well, why the markets? This is the US dollar." Because what this is saying is so scary, folks. If the dollar breaks this longer-term trend line going back to the financial crisis, I do think the downside escalates. All right. Now, again, is that good for gold? Probably over the mid to long term. I still think gold is getting close to a corrective level, if not at one. And we'll talk about that soon. But the fact, like I said at the beginning, that gold is making the move it has and silver to some extent as well. But gold to me is the pure play. That's the hedge. That's the insurance policy. When I bought my gold years and years ago that I still hold today, I was buying it not because I could make a quick buck, not because I was looking to sell it at 5,000, not because I was even looking to sell it at 6,000, because I wanted to hold it for the the rare, hopefully never happening Armageddon scenario. The scenario where the dollar is no longer the reserve currency, the fact where European countries and Asian countries are dumping dollars, not buying Treasuries, and that's what we're starting to see, and that's what even retail is now sniffing out.
Now, again, please understand, I fully anticipate at some point a flush out to wash out the weak hands in gold, maybe a $1,000 drop, whatever it may be. But do I think in five years from now gold is north of 10,000? I do. I do, folks. I literally do. It's just again, we have seen we saw Doge in the beginning of 2025. We were already, all right, they're going to cut all this spending. They're going to get the fiscal house in order. Doge got literally vanished. It got annihilated. It's no longer there. All right. The government now spending, if you look at the stats, more money than it was before Doge. All of these things unsustainable. And you can go to even Jerome Powell, he even was asked yesterday about this and he basically said, "Hey, listen. We can handle the amount of debt we have right now. If we get it under control and we can maintain that debt, the trajectory of spending, the amount that's being added per year to the US deficit, that is unsustainable and it will cause a catastrophic event later on." Now, is that a year from now, 5 years from now, 10 years? Frankly, I don't know. I don't think anyone knows. We don't know how many levers the government can maneuver, but you just got to be aware of that. And so for me, if gold pulls back significantly, will I buy more? Yeah, I will, frankly. And I'll look for other assets. I'm a big fan of rhodium. Now, rhodium has no ETF, but it's it's like a hundred times rarer than gold, maybe even more than that. Um, way rarer than platinum and palladium. Um, but there's not a big market for it because it's it's such a rare metal. But, I mean, these are the types of things I think about. I think about, okay, well, what else is there? What hasn't run? Rhodium's trading about $10,000 an ounce and it's about a hundred times rarer than gold. And so in my head I'm like, okay, well that means that potentially there's more upside there if it were to play catch-up to gold. Now again, it's an industrial metal because it's used in catalytic converters and other things as well. But my point again is looking for the types of things that haven't run. What hasn't run that you could view as a way to offset fiat currency depreciation or printing.
Now, oil's been one of my top favorites, right? If we go to oil, I mean, look at oil, guys. It's ripping. I, you know, again, I pounded the table on this. I was called stupid. I was called all the names in the book for being bullish on oil down here. Now, listen, I've missed many calls. I'll admit that, right? There's been many ones where I've said, "Oh, it should do this and it didn't do that." But generally because I look at charts, I have probabilities on my side. And this was a great call. I mean, look at this. We were I was going long right down here. Look at that run to the upside. And I don't think it's done yet because again, you know, my thesis is not only charts, right? I I'm I'm generally a technician, but as you guys know, I dabble in macro data. I look at the data. I look at chart data. I look at macro data. And what I know is that if you go back 10 years, oil was trading at the same level. If you go back 20 years, oil was generally trading at the same level. But if you think about the amount of inflation that has gone on over that period, oil should probably be $100, $120 a barrel. Now, I don't think it's going there because we have a lot more supply. We're not as dependent on the Middle East. In fact, we're not dependent anymore at all. But again, just doing inflation adjustments to oil, it should be at $80, $90 a barrel. It really should. Now, for the economy, that would be very detrimental, right? I mean, that's probably the one inflation angle that's come down is gas prices. Everything else is going up. I mean, look at copper. Copper hitting a new all-time high again today along with these other metals. So, there's inflation out there, but in select areas, it's a little bit more under wrap.
Now, think about this. Go back to the chart of oil. If you go back, and I want to point this out, guys, where was oil trading at the start of the year? All right, right here. This is where we closed December 31st. Oil is up 15%, 15% on crude oil in January. Now remember in mid-February we're going to get CPI data. Think about that. All right. Now listen, we'll see what these CPI data. We'll see. Are they going to fudge it? Are they going to kind of do this? And they going to massage it a little bit. But in the very least, we know copper's at all-time highs. Oil's at basically, you know, 15% gain in in a in January, which will be in the number in February. Gas prices are starting to move up now as oil is starting to rally. By the way, tensions with Iran are starting to mount as well. Again, we'll see what happens in that scenario. But my point is the CPI data that's my big kind of wild card is that in the months of the next basically by the by the second quarter of 2026 I think inflation starts to go up which is going to make the new Fed chair a lot of pressure from President Trump to lower rates. It's going to be really hard and I don't think the market's thinking about that. I don't think the markets and By the way, I think part of part of gold going up is it's an inflation hedge, right? That makes sense. It's telling us something. It's forecasting something.
All right, so anyways, let's get back to the charts, guys. Again, a lot to go through here, but we have Tesla. Tesla rallied initially on earnings and is now pulling back. It's still green on the day, but what a fade on this stock. My big thing is this. They basically had a horrible quarter um compared to last year in terms of sales, in terms of profits. But Elon Musk is a master at diverting your attention and saying, "Hey, don't look at the car sales. Look at the robotics. Look at the robotics we're going to be building." And so it's maintaining this incredible valuation because of Elon Musk. Frankly, if if it was anyone else than Elon Musk, this stock would be trading at a quarter at best of where it's currently trading. Right now, the PE ratio makes no sense. But if you go into, oh, well, robotics, we're going to do all this. Okay, now it makes a little bit more sense. At least that's what investors are saying.
SAP, big drop on SAP today on earnings trading down around 97 and change. There is a good level here around this 97, 197, excuse me, 197 level. We've already kind of been there. Let's take a look. We did bounce off of that pierce level here. We're coming back in on an intraday basis. But SAP for me, folks, if I'm looking to trade this, let me just see here. Now, it's got to be lower than that. I'm going to start eyeing this right in this 179 to 175 range right down here. That looks interesting. And then on a swing trade, a gap fill at 163. So, these first two would be day tradable levels. Everything else would be swing trades.
WHR getting hit a little bit on earnings. It's not really a big enough drop on earnings to get my attention. This gap filled down here at 65.50. I would consider day trading it. I will not go near this in the near term as a swing trade.
Caterpillar is up slightly on earnings. The stock here, look at this. It's basically at the high end of what we would call a parallel. So, if we look at this chart, right, you can see here and we bring this up into this range. It's just been just been hovering up in this range. Very overbought stocks fractionally higher on earnings.
Now, Apple reports today. About a week and a half ago, I said, "Guys, Apple's into major support. Look for a bounce." It bounced. Boom. Great call in this my trading game plan if you caught it. Now, going into earnings, remember, Meta bounced before earnings. Microsoft bounced before earnings. One went up, one went down. I'm going to go with the same thing here. If it falls, you'd probably have support around 244. If it rallies, big resistance around 270. I don't have a good guide for you on what it's going to do on earnings.
All right, Bitcoin. Bitcoin continues to look horrendous, folks. And this again is a major issue with Bitcoin. What is it? Is it a risk asset? Well, it's certainly not at the highs like the stock market. Is it a gold digital gold? Well, gold's at all-time highs, and Bitcoin is basically at 52-week lows. It's got to figure itself out. Chart is bearish based on technicals. I still think it's going lower before I will consider really loading up. I've dabbled in it in this range, but I'm really looking at this area down here. This will be my viable level.
Gold, we talked about this already. What a move on gold. Again, piercing 5600 um earlier in the overnight, pulling back a little bit today, but again, this is in in price discovery. Until we get a topping tail or something, there's nothing to do here. Silver pushing up as well. This may negate the topping tail from Monday, folks. So, it may negate the topping tail from Monday. Let's see where we close on silver. Oil, we looked at that. Great move on oil. We'll see again how that plays. And then natural gas. Here's your chart on UNG. Remains pretty much at resistance. If it can break through here, you might be able to get up into this range, but for the most part, I still think a small pullback is due before further upside.
Listen, I talked a lot today, folks, and I apologize, but there's a lot going on here. And it's it's not just like, oh, this stock's up, this stock. I mean, these are fundamental things that are the cracks are widening. Even though the stock market's at all-time highs, even though you have, you know, all these other things that seemingly are doing well, the AI trade is basically propelling the GDP, the country by itself, like single-handedly. There are some major issues here, and we as citizens either of the US or even of the world, we've got to start looking at this and saying there's got to be some changes. Fiscal responsibility must come back or we're all going to pay the price. Listen, I love just the idea. Hey, listen. You get a you get a $100, you get a hundred. I mean, just like But it's not feasible. You can't do that without having repercussions. And we've been pushing off the repercussions. At some point, it's time to pay the piper. You guys have a good one. I'll keep you posted as always, folks. I'll talk to you soon. Take care.