Transcription
This week's trades, market movers, and technical levels that count, wrapped up with clarity and precision. This is a weekly wrap-up with Verified Investing.
Hey guys, welcome to the weekly wrap-up. My name is Gareth Friday, uh, Gareth Soloway, and happy Friday to each and every one of you. Love you all. Thank you for hanging with me all week. It has been a wild week.
So number one, markets did see by the dippers right out of the gate. Big gap down this morning, continuing the sell-off yesterday. We did see a big boost. However, it is fading into the end of the day. Markets which had turned green are now back to the flatline, even turning slightly negative.
Now keep in mind psychologically this is exactly what you expect after two down days. In other words, yesterday a big sell-off day. Markets gapping lower by 1% today. This is what the buy the dippers have been waiting for. But be careful. The charts say this will only yield more institutional dumping and markets inevitably are going lower. So be careful folks. I know we all think oh the markets can never go down. And I'm here to tell you I traded through 99, 2000, 2007 into 2008, 2009 financial crisis. I've traded through them all and I'm seeing the same signals as prior to those big drops in the market.
Now listen, it may not be a 50, 60% drop but in the very least the projections I'm seeing are a near-term 10% drop in the S&P and up to 15% in the NASDAQ.
Let's get into the action here guys. Taking a look at the S&P today. This is your intraday chart. Notice a big gap down, a big rally in the first little bit of the day and then some choppy action with us fading into the end of the day.
Flipping over to one of the scariest charts out there, the S&P parallel. This S&P parallel goes back to 2020. The COVID low touches the highs from the bull market in 2021, the lows of the bare market and then ultimately that low of the liberation tariff selloff right there in April. What happened? We came right up and it's rejecting it off that level. Okay.
So again, the key is this. When you find a parallel where price reacts like this over and over again to the upside off of the lows and the downside, we have no other option as a logical data-driven investor other to assume that this could be a major top in the markets. Now, you can see my white trend line right here. This is where I expect first major support to be. Now, listen, we're not going to go straight down. Of course, just like today, we opened lower, we rallied back. We're going to close flattish on the day. But overall, this is telling me that even with chop, eventually we end up down around 61 and a quarter. That's going to be 6125 on the S&P.
NASDAQ. Take a look. We were borderline about to confirm a breakdown. We did not confirm the breakdown today based on us not closing below yesterday's low. But look at today's action. Look at how the market rallied on the QQQ, NASDAQ 100 right back to that trend line and was rejected. And now we have the S&P. Check that. The NASDAQ, the QQQ is flat on the day after turning green. In fact, we were up significantly. If you look on percentage terms from yesterday's close, we were up almost 1% on the NASDAQ 100 before reversing back down. And we are now negative on the QQQ with about 1 minute to go in the trading day.
Now again, what does this tell us? It tells us that cracks are emerging. We've talked about the AI trade. If you followed me, you know about all the issues I've had with the AI trade that people were glossing over. They were just buying obliviously just saying, "Hey, listen. Markets can never go down." You know, the times I hear markets can never go down just before they're about to dump out. And I've heard that so many times. They heard, "Oh well, M2 money supply just keeps going up. Oh, the Fed will cut rates. Oh, the government will just print us out of this issue." Doesn't work like that, folks. Again, all of the same feelings we saw before 99, 2000 and 2008 into 2009.
Okay, back to the charts we go. The 10-year yield ending the week on a strong note. Number one, we had a weak bond auction yesterday, which means people don't want to buy or countries don't want to buy our debt for the interest rates being offered. By the way, that makes it very tough for the Fed or the US government to sell their bonds at the rates that they want to sell them at, right? It means that people or countries are demanding higher interest rates. Well, how does the Fed cut rates when the rates are actually going up because people don't want to buy the US debt because we have so much debt? All right. Then you throw in the fact that the Fed has actually been very hawkish and there's only a 50/50 chance of a rate cut in December.
All right, then we flip it over to the US dollar on this Friday afternoon. US dollar was flat today. Again, we've been talking about resistance right up here between 100.3 and 101.3. There's a big resistance zone. If we zoom out, you can see all of that resistance there. And so far, price is respecting it. On the downside, we have this trend line going all the way back. Look at this, guys. If I go to my weekly chart, it goes all the way back to the '08 lows when the dollar began to gain traction as the best place to stack money during the Great Recession and the following period. That is again, it's still holding because we haven't broken this line. But if we break this, bye-bye US dollar. Now, it's not going to crash, right? I mean, nothing nothing in general crashes. Usually crashes occur at the end of moves, not at the beginning. But either way, this would be very bad for the US dollar if we break this 96.5 level.
Now, checking in on the SMH. SMH closed flat on the day today after gapping lower. We did see a resurgence. Nvidia rallied back up and saved the SMH, the semiconductors. But don't forget folks, we flip over to this chart. This is our weekly chart of the SMH. And remember, every time we've been 102% above the 200 weekly moving average, okay, 102%, get that as accurate as I can, then we're looking at a big correction. And that's where we are. That's what the data is telling us here, right? So, we have 102% in 2021, 45% drop. 102% in 2024, 40% drop. And then lo and behold, if we look right here, folks. All right, what did we get to? Right up here, right at the highs, 102% above the 200 weekly moving average. And you can already see it working, right? I mean, it's already pulling this index down or the ETF down. And again, what ends up happening is this will slowly rise, right? This is the 200 moving average, but this gets drawn back to home base, right? So again, that's what you're kind of looking at. Now, we will have major support here, major support right in here. So there will be stops along the way. Even this area right in here will be some good support, but eventually it seems historically to draw price back to that hit of the weekly 200 moving average.
Nvidia today, Nvidia was below its major breakdown line at the open, closed strong on the day, up almost 2%. Interesting because the SMH closed flat but Nvidia was much much stronger. And what that tells us by the way is that essentially money was flowing from some of these ancillary hyperscalers and AI chip stocks to the best of breed which is Nvidia. Right, Nvidia, Broadcom, some of these mega players because money feels safer in those plays as the dominant forces and that's why you see again the SMH didn't perform that well today, flat on the day, but Nvidia was much much stronger.
All right, Broadcom. Speaking of which, you can see it opened lower but rallied and closed green as well. This is another trillion, 1.6 trillion dollar player. Now, this morning in my trading game plan, I talked up being long on uh Regetti down here. Great bounce on Regetti. Did pull back off of the highs, but I still think there could be a little bit more upside before further downside. So, I still think Regetti is going lower, but again, good bounce today on the back of that. Congrats if you caught it.
Um, today Meta. Meta was flat on the day. So you can see a lot of these mega caps were flat to negative even though we saw again Nvidia higher on the day. So Meta, I still have a downside target on Meta down to this trend line. This is your November 2020 low, 2022 low connected through the liberation selloff lows. Look at how close we are. This will be a buying level for me as a swing trader right into this 575 level or so. Look at this kind of drop that we've seen. It's incredible. So, we'll watch that. I'll keep you guys posted.
Here's Alphabet, also negative on the day, down about 3/4 of a percent. It did bounce off of the lows, but came in. And then we have Tesla, which did eke out a small gain after gapping lower, but this has really started to come down. It did break some key support. We can see right here there's a trend line that goes right through here, through these lows, right through this low, right through this low. We broke, we did bounce back, but look at the high of the day, right back to that line and it rejected it again. Based on how we closed today, I wouldn't be surprised if we see a down day on Monday.
The only potential would be is if we got a big announcement from the president or something, some way that he's going to try to cushion this market because let's be fair, Donald Trump, President Donald Trump does not want the markets to go down. He hates the markets going down. What's funny though or kind of strange is that the only way inflation comes down and the Fed probably cuts rates is if the market comes down. And again, the reason is, and we've seen this, is that lower to middle income consumers are not spending anymore. They're they're in shock from all the inflation, all the costs. It's the high-end with a lot of investments that are spending like drunken sailors that's keeping inflation elevated. You add in a little bit of the tariff inflation as well, but ultimately again, be interesting to see if the markets correct and then actually the Fed could start cutting rates more.
Um, Micron today opened lower, closed decently. It's still stuck in this parallel. Once this parallel breaks, watch out below. Look at Robin Hood today, guys. Robin Hood did close flat, but again, opened as low as $114. It has broken the ups sloping parallel. It means it should go back to about $100 on the chart.
All right, let's flip over to crypto, guys. Crypto continues to be so much weaker than the market. It's pretty remarkable. So, you think crypto is a risk asset, and you're right. It's even riskier, which is why it's derisking faster than the stock market.
Okay, looking at this, let's go to this here. Let's go to Bitcoin. Bitcoin just off the lows of the day. I gave out this level here. I said, this is where Bitcoin's going to go. The beginning of the bull market run. I said this is where I would nibble on it. And I did nibble on it here down in this range. So, we'll keep an eye on that. But either way, folks, you could get a bounce here. I would I would probably think there's a bounce, but if it breaks this level, it's going to 75. 73 to 75 is the next target. So, if you're a bull, you do not want to see a violation of 93. You do not want to see price closing and confirming below 93,000. That would be hugely negative for Bitcoin with a likely downside target of 73 to 75,000.
Uh, ETH is coming down. It still hasn't hit my buy level down here on ETH. But again, I will be monitoring it this weekend as it comes in. You can see the parallel and then this flat top zone of support right around basically anywhere between 2750 and 2900. There should be a lot of support on ETH.
Gold. Gold pulled back today. Nice pullback. It closed back below this support. That makes it very vulnerable next week to trading down towards 3900, 38.85, which again was this low pivot right here.
Silver, silver got hammered off the double top down yesterday, down today. Still hanging in there, but again, watch support now at $49. This high and this high area right here, that's going to be near-term support at around 49 to 49 and a quarter. If that breaks, we should look to test 45 and change. I still think this is going down to 43 to 42 before it finds major technical support.
US oil again still with a cup and handle pattern. Beautiful bullish pattern. If you're a trader here and you know the cup and handle formation, like I said yesterday in the trading game plan, in my game plan, this red candle is never my favorite. I do not like seeing these wide range red candles. You can see it happened over here and then we did come down more. So listen, the pattern, the cup and handle is still technically holding, but it just makes me a little bit more wary. Like in other words, I pay closer attention now because of that. Still with a slight bullish bias, but again, we need to see a breakout above this trend line basically above $60.5 to send us towards 65 to 66.
And we did see natural gas pulling back today after a stellar up week, pulling back just slightly here. Again, still has not reached my topping point yet. I'm still looking for about $5 to $5.30 before I think this thing tops out and has a bigger significant pullback on the chart.
So to summarize guys, it was a wild week of trading. We saw up days, we saw down days, we saw big down days, we saw reversals, uh, we saw earnings. But the bigger thing is next Wednesday after the close, Nvidia will report earnings. That's going to be huge. That is a make or break for the market. I don't think people understand how big this earnings announcement is now for the AI stocks. The AI stocks are teetering. They're teetering. Many are starting to break down. Nvidia was able to save itself today and close decently strong. But if Nvidia does not blow the doors off earnings, then this market will see significant downside and the bubble will officially burst in the AI plays. So, next Wednesday after the close is huge.
We'll see when we start getting economic data from the government now that the government has reopened. But needless to say again guys, I will walk you through each morning 9:00 a.m. with my game plan. And then obviously we have trading the close at the end of the day Monday through Thursday and then me on Friday with the weekly wrap-up. You guys go have a great weekend. Go relax a little bit. It's been a great trading week, guys. Congratulations if you're with us for all of the profits in the live day trading room, in our swing trading service, even in the crypto service. We had some great winners this week. Go and enjoy. I'll talk to you soon. Take care.