Retail FOMO Is A Trap, S&P 500 Upside Capped? | ASML, Oil & Bitcoin Targets

[0:02]My name is Gareth Soloway, and I was a losing trader until I mastered technical analysis. Logic and charts beat hypes and narratives every time. Now, I teach investors the same techniques that made me a multi-millionaire. This is my trading game plan. Hey folks, welcome to my trading game plan. My name is Gareth Soloway, chief market strategist here at verifiedinvesting.com. All right, so number one, markets are neutral on the day. We're kind of seeing a little bit of upside creeping in. This on the Nasdaq, I believe would be the 11th up day in a row. We did get one down day in the mix on the S&P, but it has been a tremendous rally. Really blowing through key resistance levels along the way as psychologically retail is FOMOing into this market. Now, I would just caution, and we went over this yesterday, that this is a far different scenario than 2025 when the market bottomed in April and rallied the rest of the year. But I think a lot of investors are piling in. There were even a lot of hedge funds that really were on the short side of the market that are now clamoring to play catchup to get back in, adding to the buying frenzy. Now, let's go into the charts and we'll discuss this a little bit more. This is the S&P futures chart, right? So another update yesterday, it was very light volume. We were just grinding higher for a majority of the day. Overnight, you can see a lot of sideways chop as all eyes are on oil. Now, let's be clear, one of the catalysts to upside is that oil continues to pull back, right? So yesterday we came all the way down near $90 a barrel, and that downside is directly influencing the S&P to the upside, including market sentiment, right? Oil coming down, people feel better, they see that happening. This this carrot's been dangled out in front of investors about a deal, but in reality, nothing has come forward. But the deal, the the hope of a deal has brought in oil and rallied the market significantly. All right, so now if we flip over to the S&P, let's discuss why this is a little different again. So right now, this is your next key resistance zone right up here, which is your all-time high on the S&P 500. Again, this is anywhere between 6980 and around the 7,000 level. Now, remember, we hit 7,000 and pierced it for one day back in January. And that was the highest point on the S&P 500. We then started to have this downward momentum. It took us back to the midpoint of the channel. Now, the midpoint was where I went all in on the long side and we had this huge bounce. Now, I will say, as of yesterday, I am a majority short the market. Now, I want to be clear, I still have some longs in the software sector, right? I still have a few China longs out there. I still like there's a few possibilities for further upside, but at least for my positioning with smart money stocks and ETF members, we've now moved more and more on the short side of this market. Including names like Micron, we shorted yesterday right after hours when the market closed, we're up already about $10 on that short. But there are other plays out there that continue to look right, including Google, Amazon. A lot of these names have rallied 20 to 25%, and these are multi-trillion dollar companies. They should see a retrace. Now, remember, I'm a swing trader, so I don't really care about where the markets are a year from now, I'm looking at in the next week, two weeks, where is this market going to go? So if we look at this, the reason why I'm hesitant to say it's a repeat of 2025 is simply because we were at the low end of the parallel. So there's a lot of upside when you're at the low end in COVID, you rallied all the way up to the high end. When you were at the low end here, you rallied up until the tariff took us down, but still a monster rally. And then from the tariff low, we could rally all the way up to this parallel. The problem is, when we look at the chart, number one, look at how high we are and look at how much upside is left until we slam into that parallel trend line up there. Only about 2.5%. So that's the upside potential on the S&P right now, versus here, if you look at where we were, so this is about 10, 11 days, we were right here. Look at how much upside was left to get to the high end versus here, a whole 2.5% upside. Now, many people out there will use their emotion and say, okay, well, the market could break through that parallel, right? I mean, yeah, it'll just blow through it. Sure, that's a possibility. Anything is a possibility. Aliens could land tomorrow, maybe they've already landed. We don't know. But the point is, is that a good trader doesn't hope and dream, a good trader uses technical support and resistance to make high probability decisions. And that's what you have to do. Now, if it breaks it, okay, game on. Now, we can start to go up even more, but you can't assume it's going to break. That's the kicker. All right. So that's where we are today. Now, I'm going to monitor this zone right here. Can we get through the all-time highs with the S&P flat to slightly positive this morning? We will watch and see. If it does get through the all-time highs, I do think we attack that upper line there. All right, looking at a couple other charts, here's your oil chart, let's go to the daily. Here again, you could see that here we had the big drawdown, bare flag, we broke. Now, we were overnight a lot lower on oil. Oil got as low as 80, below $87 a barrel in the overnight. It has all the way come back to $92 a barrel. And this is where it gets very interesting, right? So, the fall in oil has preemptively assumed that the straight will be reopened and there will be a diplomatic solution to what's going on with between the US and Iran. Nothing's happened. The straight's not open, the US is blockading it from ships that Iran would let go through, including Iranian ships, and Iran is not letting anyone that's not a friend go through without paying a $2 million per tanker fee, right? So there's nothing going on there, there's still a disruption. So, the market has kind of priced in a solution or at least partial solution. It has yet to come. What that does is when you have a market that rallies up this much, and it's pricing in a solution, if this goes on longer and there isn't a solution, there's a lot of potential retrace and pullback in the market. And let's be fair, even if oil stays at $90 a barrel for the next couple months, there's still a lot of economic damage that's going to be done. All right. Let's talk about the semiconductor trade. This is an interesting one. I remain short the semis, I added more to my short yesterday on the semis right in this upper range here. This is the weekly chart, and why, one of the reasons also that I'm concerned about the semis, is this. This is your weekly chart, high from October of 2025. Higher high here, you know, going into January and February of 2026, and here we are at an all-time high on the semis. Now, that's great, higher highs is a trend, right? It's an uptrend. Problem is, look at the RSI. The RSI is making lower weekly lows. What that tells me for those of you that may not be familiar with the RSI, it tells you that the relative strength, which is what it is, the relative strength index, it tells you the underlying pressure of buyers is being diminished while institutions generally are starting to unload heavily into this move. So it's retail buying, which is generally looked at as a weaker buyer, versus institutions, which are either on the sidelines or selling into those buyers. So just a little bit of a heads up. Now listen, a weekly RSI could take weeks to play out, right? I mean, it could take a while to play out, but it is these type of signals that gets me on high alert that the semi move up may not be sustainable. And we've had a 25% move up in the semiconductors in just the last two weeks. Incredible move. Now, speaking of semiconductors, ASML reported earnings yesterday or this morning. Really, this morning, it was around 2:00 a.m. Eastern time. It's a European country, so that was their morning period, right? So, the kicker here is, the stock is coming down. It did have a nice little bounce here on the on the semis chart here, but the key is is that their earnings were very, very good, their revenue beat as well, but their Q2 guidance was slightly weak. Now, the kicker here that we have to remember is when you have a chart that has literally gone up from back in April. So one year ago, this was a $580 stock to, you know, where it closed yesterday at 1,500 in change, essentially a 200% rally in a year, and the semis have rallied just in the last, you know, week essentially. Look at that move up. The stock was priced perfect for perfection, meaning that it had to beat on everything. Their guidance had to be raised on everything. And now listen, they actually did raise their full year guidance, it was just their Q2 that was weak, but the markets are saying, wait a minute. You're saying Q2, but then you're trying to cushion it by saying the rest of the year will be better? Okay, well, we're not going to trust that, right? And so, these are the types of things where if you even have, if a stock has rallied this much into earnings, and there's even a glimpse, a flash of a negative, they're going to get sold off. Because they're priced to perfection, it's like if a drug company doesn't care cancer and it's priced to perfection, it's going to fall, I mean, it's just the nature of it, right? So, that's where we are today. Now listen, it's not a big fall at this point, you know, we're talking three, two to three percent, but does it dent the massive rally in the semis that we've seen? We'll watch today and keep an eye on it. All right. Um, speaking of which, Taiwan semi reports tomorrow morning. So Taiwan Semiconductor, another one that rallied just from April of 2025 from $134 to a current level of 381. They report tomorrow morning, folks, and another big semiconductor, and this is known as the Behemoth. I mean, this is an over trillion dollar market cap company. This is one that will be significant for the overall sector and whether or not it continues to rally higher. All right. Now, speaking of which, Micron had a great rally yesterday, but it came in right to double top, and look, it's already down in the pre-market. But this rally, and I just want to point this out, guys, this is how whacked out this market is, is just since the low on the 31st of March. And remember, it's the 15th, so we're talking two weeks, a 50% rally in Micron. Okay? Now, you might say, well, why is that, you know, 50%? Okay, well, in this day and age that seems normal. Well, yeah, normal for maybe a $5 or $10 billion company. But Micron is a half trillion dollar company. So in two weeks, it gains 50% now now over a $500 billion company. I mean, these are numbers that are unparalleled in terms of market cap. In fact, I believe the tech stocks, the big players, they've added a whopping $6 trillion in just a short amount of time to the economy. I think in the last two weeks, the mega caps have added $6 trillion, the large caps, $6 trillion to the economy. I mean, these are massive numbers, right? Massive. All right. Let's move on to Bank of America, which reported earnings today. That stock is up a little bit on earnings, but former support level there. But if we look at this, you're seeing a move up. Where would I be looking to short this today? The only level I would look at would be this trend line. So if we were to rally, and we're actually not that far away, looks like around 5550 right up here, uh, would be a potential pullback level on the chart of Bank of America, symbol BAC. So I'm keeping an eye on this. This to me would only be a day trade. I don't have a good read on it as a swing trade, but around 5550 about a dollar higher, I would be looking at a potential short there. Now, just a couple other stocks here, guys. Um, let's look at some mega caps because I did short Google yesterday. All right, Alphabet, whatever you want to call it. Um, let me show you why. So Google here, let's type it in, bring it up. Look at this move up. So again, we're talking about a massive multi-trillion dollar company with a move from $270 to $330. So we're talking 20% plus move and it comes right into this, right into this level. Now, granted, I didn't do a full position. I always start small, but this is a great level for me at least to start a small short position. Now, if it goes to double top, what do I do? I just dollar cost average. I I basically add right up there. My average is right in here. And this is a swing trade, so I'm looking for a bigger pullback, likely to about the 300, 305 level on this chart as a swing trade in the near term. So again, we'll keep an eye on that. But even look at Amazon. Amazon, beautiful level right here. Pierces it yesterday, starts to pull back. These are good shortable levels, guys, really good shortable levels for a swing trade only. I have no clue about where they'll be in a year from now, but just on a swing trade basis, these are solid. Even Nvidia, look at Nvidia here. Nvidia comes up and goes right into massive resistance. Look at this level right in here. All right. High pivot, high pivot, we go right there. Look at the extension move. On a technical analysis basis, we should see a pullback like this into this range. See this area right here. That's going to be your near-term support. So you're looking at about a $10 pullback potentially on Nvidia in the coming days or so. Now, if Taiwan semi doesn't show a perfect quarter, that could be the trigger, plus ASML today, that could be it. All right, moving on to gold, gold is pulling back. Here's where our short-term resistance is around 48.50. You can see this pivot low. We hit it right here on the chart. Again, see right, let me see, right there. You hit it there, pull back, we're hitting it again. I do think that if the stock market continues to rally, gold can continue to go up. Next resistance would be these lows around 5,000, but the pattern remains bearish. Okay? Now again, this is the macro pattern, near-term it's neutral to bullish. But longer term, even if it goes up a little bit more, it still is showing us an inside bar pattern that eventually leads to the downside. Same thing on silver by the way. If we look at silver, silver again, crept close to my 82 resistance, pulling back just a little bit, but the pattern again, all red, sharp drop, small grind higher for a long period. That means there's digestion of the down move going on here and eventually you expect a roll over and move even lower. Let's look at natural gas. Remember, I picked up a small nat gas long via um UNG the other day, and basically it's not doing anything. We're right here at this lower range, still kind of just hugging this little area of this wedge pattern. It's amazing how quiet natural gas has gotten. Again, I do think there's a chance it could break here, which is why I did only a small position on the long side for myself. If it does, we're likely going down, I mean, maybe down to this area here around 236. There'll be a good pivot on natural gas, but this is a big level right now to monitor. Let's see where this ultimately goes. And then lastly, Bitcoin, folks, Bitcoin rallied yesterday. Where did it go? I told you guys yesterday to watch this level, I said 76,000. Why? Because that was the pivot top right here. Short-term resistance, pulling back. Now, if it starts to bull flag here, bull flag would be sideways chop, look for that next move up to get to about that 80 to $85,000 level. All right, but right now, it's capped at 76,000 unless that breaks. And remember, we have our downside support here. And this line again is if we at some point break this, the bigger macro bare flag, which is right here. We look, listen, we looked at this same pattern on gold and silver just a little while ago, right? So I mean, it's it's virtually the same as gold and silver are forming. Um, they're all bearish, macro bearish, meaning that ultimately these patterns should play out to the downside, even on Bitcoin. The question is, is there a little bit more upside into this level here first before we get that next flush in cryptocurrency? So something to watch there on the charts. All right, guys, so listen. This market incredible. The drop, the pop, the whipsaw, the news driven headlines, everything about oil right now. I do think that the market has forgotten about the other issues that the economy has. So that is important that at some point when oil gets to a stabilization level and it becomes not such an important factor for the market, we will see the market turn its attention and maybe it's even turning its attention to earnings right now, it will turn its attention to the macro picture for the US, away from oil. Okay? Now, it's somewhat intertwined, but overall, that's what I'm looking for. All right, guys, I need to get going. Don't forget, swing trades over at verified investing. You can see my live portfolio there, smart money stocks and ETFs, that's where it's at. And also, the day trading chat room. We'll be trading live this market. I'll talk to you guys. Have a good one. Talk to you soon. Take care.