Transcription
My name is Gareth Soloway and I was a losing trader until I mastered technical analysis. Logic and charts beat hype and narratives every time. Now I teach investors the same techniques that made me a multi-millionaire. This is my trading game plan.
Good morning everybody. Welcome to my trading game plan. My name is Gareth Soloway, chief market strategist here at verifiedinvesting.com. So futures are slightly lower. This is again gyrating inversely to crude oil. So when crude oil goes up, futures go down, setting up for a slightly lower open on the S&P 500.
It's been a wild week, one where Jerome Powell has come out and basically said he has no clue what's going to happen with inflation, but ultimately the Fed is not liking what they're seeing in the labor markets plus inflation. Then you turn to the PPI data this week which was extremely hot all before the numbers on oil started to surge to the upside. So again that tells us inflation will likely surge even more in the coming month and months. Then turn to micron earnings this week which were fantastic but again it was priced to perfection and the stock fell to the downside.
Now yesterday we did see a dip with a little bit of recovery late in the day on a rumor that Israel and the US would try to take over the straits of Hormuz. So far that's been discounted quite a bit but classic triple witching option options expiration maneuvering here on this last Friday of the quarter or at least the third Friday of the quarter here.
All right. So, when all is said and done, if we flip over to the S&P futures, you can see overnight we had a pretty nice dump to the downside. We've now recovered partially um almost getting back to the flatline. So, if we look at yesterday, by the way, look at this. The low from yesterday right here on the futures and look at where we went in the overnight. So, this was yesterday's during market hours. The low we had a classic double bottom and so far that is held. The good thing about this, it gave gives us a level to trade against. If we look at this, if we break this today and close lower, that could be problematic for Monday. But as of now, this is a technical level of support.
Now, the big headline I want to talk about before we get into the daily charts is that ultimately what I'm seeing in the price action is telling me we're very close to a bigger rollover in oil that could take us back to $80 per barrel, potentially as early as next week. Now again, is it going to be Monday? Is it going to be Wednesday, Friday? I'm I'm not sure, but the probabilities are starting to stack that we'll see some sort of draw down next week in the price of oil. To confirm that, the S&P 500 has now kissed a major technical support. While I don't change my view long-term that the markets will roll over significantly and go lower, in the short term, I would start to expect a technical bounce.
All right, let's go to the charts and look take a look at what I'm talking about here. Here's your daily chart of the S&P 500. So, if we zoom out, we start at the macro view. This is where I'm getting my continued longer-term bearish uh analysis from. We have this bigger parallel again. We came to the high end right up here. We had the rounded top of institutional selling into retail buying and now we've curved over. So, again, unless we were to get above this parallel, it's hard to be bullish on the markets um for the longer term.
However, if we zoom into the near-term and we look at the t the tiny tinier time frame, what we have here is a trend line that extends through a bunch of pivot lows here. Right? So, we have one, two, three, and yesterday we kissed on the fourth hit. All right? So, in the short term, especially when price has been away from this level for this long of a period of time, it generally breeds a short-term bounce. Now, how high can that bounce go? Well, you know, maybe back to 6,800, 6750, somewhere in that vicinity. It's not going to be a massive bounce, but I think it happens very quickly in a day or two in the markets, which will make it seem very impressive to retail. And I think that'll get the retail investors buying the dip once again, changing from more skittish right now to more of the bullish bias and get them back on board, which by the way is exactly what the institutional money wants. They need that exit liquidity. They haven't been able to exit all of their positions that they wanted to. Just a decent chunk in the rounded top. They need that exit liquidity back in play.
All right. So, we can see right here, this here again, this is the key level right around this 6550 level. If you go back a week or two, this was the level I alerted you that this would be your first big support. We have now kissed that level per yesterday's low. Maybe we retested today. That would be the lows of the futures this morning. We'll have to watch and see. I would then expect a general bounce on the S&P. Again, how high is tough to know, but maybe back to 6750, 6,800 and then an eventual roll over to the downside heading down to this major technical support right in this vicinity. All right, so again, we'll watch and see.
Now, what's the catalyst for the bounce? Well, if you're going to get a bounce, it's got to be oil related, right? So, if we look at crude oil, crude oil, again, you have that pattern formation very similar to silver right now. big topping candle here that gives us a top to trade against. This now has been an inside bar action. I would expect this to roll over and come back in. First stop should be right around the $77 per barrel level. And then if that breaks, we could actually go back to below $70 per barrel. And in the short term, that absolutely would give the markets a bounce. There's no doubt about it that a drop in oil would bring down yields. the 10-year yield again at 4.3% give or take a little bit here. So that has been a major pressure on the global and domestic economy and then obviously the dollar which has really sorted.
In fact, let's take a look at the US dollar here. The dollar this is a bearish inside bar parallel. Now a lot of people look at parallels and say okay well in general we buy every level here right you buy these you sell into these levels here right which has worked but when you look at the degree and this is getting more into kind of advanced institutional analysis the degree that the angle of this parallel is see how steep it is these parallels tend to break after four to five hits and by this one two three this would be the fourth here that tend to go like this and then break to the downside like that. And again, a drop in the dollar would obviously insinuate a risk on in the market in uh bigger players dumping US dollars as a safe haven asset and that could bring on a bounce in the market. So, lots of things are starting to align.
Obviously, I'm going to be frank with you guys. Timing is so hard. So, so hard again when you're getting into these minute details Monday, Wednesday, next week, Tuesday, Thursday. I mean, again, very hard. But keep an eye, the charts are starting to turn towards a near-term bounce in the markets before that next leg lower. As always, I'm going to give you guys up to date Monday through Friday at right at this 9:00 a.m. time frame, my live analysis.
All right, let's go into a couple other charts. Flipping back to the NASDAQ, you can see the NASDAQ did hit this trend line right here, this pivot low going back to, I believe this was uh on November 21st, and we did get a bounce. So, that's a positive for the NASDAQ. As long as it holds this 21,900 level, you would generally expect a short-term bounce before the next breakdown comes in. Remember, my eventual target here for basically the first half of 2026, so by June, July would be down to about 20,000 on the NASDAQ. End of year price target or early 2027 would be down to the lower end of the parallel here all the way potentially at 17,000. So again, we're talking in time frames. Again, obviously got to keep track of those.
Okay, now flipping over to stocks on the move today. SMCI. Oh my goodness, this stock can't get out of its own way. Um, basically what happened here, folks, and this stock is down 27% this morning. Executives are being charged with basically smuggling chips to China. And again, it's it's amounting to as much as $2.5 billion dollar in chips, which is massive, over to China. Obviously, there's restrictions that the US government has put into effect. These these executives obviously are being charged. Um, and that is, you know, even though SMCI was not named specifically in the indictment, it is still obviously flame spreading, right? I mean, it's guilt by association. And considering these were highlevel executives, it's hard to imagine that the company didn't have some factor in there. So that's why that stock is dropping.
Now when you get these type of drops, obviously I start looking for buying opportunities, right? I don't just panic and saying, "Oh my goodness, I'm going to stay away." I start looking for swing trade levels. So let's flip back and take a look. The stock again down here trading in the 22 range after closing yesterday above 30. Massive drop. If we look at this and we zoom out, I have my levels here for a swing trade already isolated down 1875 to 675. I would accumulate small positions. Obviously small because of the risk. But if we take a look at this guys, you can see there's a gap fill. I don't know if you can see this, but there's a gap fill all the way back in 2023. Let me zoom in on this and you'll see what I'm talking about right here. Gap fill right here at 1675. See the big gap right there. So that's number one. That gives me my low end of my target zone. And then if we zoom out here, we have a gap fill and double bottom from November of 2024, which was the last time there were fraud accusations on this company. Now, listen, I wouldn't fault anyone for kind of saying, "Hey, I'm going to stay away from this because obviously there there's some pretty nasty stuff going on or at least the threat of nasty stuff." But obviously as a trader, I focus on the charts. The charts give me probabilities and I take that and then obviously I adjust share size, right? Share size is how you analyze risk. So gap fills or gap fills in general. But the way you say, okay, this stock has more risk to it. Okay, instead of doing 10,000 shares in that zone, maybe I'll do 3,000 or 1,000. Right? That's the way you mitigate risk. Okay.
Uh back to the charts we go. FedEx is up on earnings. They had good earnings yesterday. That stock is having a nice pop. It is off of its highs pre-market just a little bit. Flipping to the daily chart. I showed you guys this chart yesterday. Look at this beautiful trend line. How price came into it yesterday and then bounced and then earnings come out and the stock shoots up. The only thing you have on this chart for a potential short is double top. Double top at 393, which interestingly enough, look at pre-market. Look right there. So, I just flipped back to the 10-minute chart here and to show you the pre-market and look at what we hit pre-market and look at the sell-off. So, the level in the double top has already started to work here. Um, am I going to take this still at double top? if it goes back there, probably not. Instead, I'll look for the even number of 400 just as a day trade. Please understand, I don't have a swing level on this. Um, it's not a good enough trading opportunity yet for a swing trade short. Uh, definitely not going long up here, that's for certain. But again, as a day trade, the 400 even number might be a level to short.
Planet Labs reported good earnings. That stock is up over 20% this morning. If we flip over to the daily chart, we can see again the daily chart, we're trading above the recent all-time highs. So the question is, well, where do we look now? Now, there's listen, it's always tricky on these fronts, right? So, a couple things we can do. We can look at a parallel. We can say, okay, here's a trend line here. What would be the parallel up here? Maybe, but again, that's quite a bit higher up in this range. The only other thing we could possibly do is bring it down and extend it down to this level. So, this high pivot which cuts through the wicks, that would be the more realistic level for a day trade today. I'll be looking at around the $36 level. So, 36ish area right up here. Notice where I'm getting this. You have your lows right here, right through these lows, which is a great trend line, by the way. And then I'm using this pivot high, which was a major pivot high. Why is it a major pivot high, guys? Because you had a long period of up and a long period of down. See, it's more like a mountain, right? It's not just like this, right? is this isn't these aren't pivot tops. It has to be a consecutive longer period and then a longer period of down. Very obvious that's a major pivot top. So, I'm using that pivot top and then basically saying, okay, well, no candle really closed above here. We're using the high of the closes. That gets me that level for a day trade. Would I swing trade short this? No, not at this point. I don't have a good enough read on that as a swing trade, but certainly 36 as a day trade looks interesting.
All right, flipping over to the oil chart. Again, we talked about this already. look for a bigger rollover next week. Now, it doesn't mean we can't gap up on Monday. I want to be crystal clear on that. If things somehow escalate even further over the weekend, you could have a gap up. But remember, as long as we don't take out the $120 level, then this is still an inside bar reversal from a topping tail. A massive topping tail be it, but still a topping tail. All right, so just keep that in mind. Watching very closely.
Uh flipping to gold. Gold had the massive multiple down days in a row. basically flattish on gold. I still think gold's coming down to 43 to 4,400. Then probably gets a bigger bounce. Um, and then unfortunately rolls over and I still think it has a chance by the end of this year to maybe tag 3500 on gold. Impressive move here and great inside bar pattern that I've been alerting to for the last probably the last three to four weeks that this and silver were bearish patterns. And look at silver. Silver bounced. It did hold the major 70 to 71 level which was key. It's now testing it again today. It's got to hold this $70 even number. If it doesn't, it could start the next leg down towards that $54 to $50 level on silver.
All right, flipping now to Bitcoin. Bitcoin again, great move here. Well, I shouldn't say great move, but good pullback. I have this new parallel I'm following. You might say, well, why? Well, because again, a good analyst is always looking at the charts every single day. And what I'm noticing here is you have all of these lows and then you have this high connected to this high perfectly to this high. Right? So essentially what we have is a parallel which tells us and number one, yesterday we talked about the 70,000 level. It did hold 70 yesterday. So that was good. It's up a little bit today. But again, let's see if it comes down. Does it then bounce back up and head again towards that 80,000 range? I'm still optimistic that we'll still get to 80, but obviously we need to monitor this parallel. Like if we were to start trading below here, that would make me think we could be headed back to 60 double bottom. Right now, we're still within support levels here. So, that is fine for now.
Natural gas, let's take a look at natural gas real quick and see where that is trading today. Nad gas is inching back down just a little bit. I do think it's interesting that again natural gas has had such a minor impact um from the straits of Cormuz being closed even natural gas uh fields and refineries being hammered um or hit very little price action in natural gas most likely due to the fact that the US has more than we can even handle on that side versus oil which has really seen that big pop to the upside. But interesting little tidbit there in terms of NAC gas. Again, I'll just monitor the levels, right? We know support is down here around 273. If this were to pop, I'd start to get interested again up here for a short around 431. That would be a gap fill on the chart.
All right, just checking back in on the S&P futures here in the pre-market. S&P futures continue to kind of chop around. Still with a little bit of a low here. Remember, this is the area we're watching today. Will it hold or will we see a flush? My guess is a lot will have to do with what happens with oil on an intraday basis. Notice the futures over the last I just showed you guys here. Let's go back to the futures chart on the 10-minute chart. You have a couple down candles here. If we flip over to oil, oil again creeping up a little bit here in the last couple candles. And you can see how the futures are reacting slightly negatively to that.
All right, guys. I've got to get going to my trading group as always, the Apex Live Day Trading Room. Uh for the most part guys, keep an eye on oil, but obviously ancillary things, but oil will rule the roost on the markets in the near term. Watch the P key pivot supports that I've talked about. Let's follow this market and make some money. Have a great rest of your day, guys. I'll talk to you soon. Take care.