SMH Trendline Breakdown Changes Everything for This Holiday Week

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>> Hello everybody. Welcome to Trading the
Close. My name is Drew Nosek. Hope you
guys all had a great weekend. And guys,
just to get you ready for the week, this
week is going to be a shortened
abbreviated trading week because we've
got the July 4th holiday landing on a
Saturday with Friday, the markets will
be closed. So, any economic data,
particularly the JOLTS report coming out
tomorrow, but then we have the nonfarm
payrolls hitting the market at 8:30 in
the morning on July 2nd. So, keep that
in mind. We've got jobs reports hitting
the market this week starting tomorrow
at 10:00 a.m. with the JOLTS number. All
right, guys. So, the markets today
elevated back up, but they're doing so
after Friday's close which the SMH
confirmed the breakdown from the
inclining trend that we've been focusing
on. We're going to jump in the charts,
take a look at this price action so you
can see what likely is going to happen
this week. And speaking of this week,
guys, as I've already said, a holiday
week, you have to anticipate the holiday
week volume being lighter. What happens
when volume is lighter? Well, you
generally have an elevated float in the
markets. All right? Unless of course
there's news that breaks in the Middle
East, something that may catch us off
guard, but in large part the
institutions do step away once we get
closer and closer towards the holiday.
And then that generally does lead to
upside movement as most institutions are
the ones putting the selling pressure
on, not necessarily retail. So, into the
spiders today, nice push up. Notice the
last previous four trading days right
through here, all maintaining price
underneath this inclining trend line,
one that I have designated between more
bullish price action and near-term
bearish price action down here. But also
notice this monstrous wick that appeared
here on Friday and a narrow body bar
implying we may actually elevate up.
Narrow body bars designate that there's
basically a battle equaling out buyers
and sellers right there on that candle.
And today the buyers went out and you
can see we actually closed above this
inclining trend line. So for tomorrow
I'm watching this gap fill for
resistance on the S&P 500 at 744 and 39
cents. If we are able to get a daily
close over that, my attention then turns
to this declining trend line for
resistance for this week roughly around
$750
on the SPY. Be watching to see if it
breaches this area going into next week.
Next up into the Qs. The Qs here as you
see up 2.49% today getting a nice bounce
but notice where price did not breach
when we were falling down on the Qs this
last week. They didn't breach this low
from June 5th. You can see each time we
touched it we actually elevated up and
closed above it today closing within
price range there from Thursday of last
week. Now if the momentum continues, if
you notice though we're in consolidation
mode. A move up and then a move down but
if we break this consolidation getting
above the high pivot from June 25th,
that could open the door for not only
this gap fill being filled at 738.10 but
then potentially testing all time highs
with the re-entry to the top of this
parallel channel. But right now we're
within this consolidation range and if
we break it to the downside next minor
support is notice we've already hit this
most recently it's going to be at
695.25.
Uh next up into the SMH. Now guys this
is the story. I highlighted this at the
beginning. SMH is what leads the way so
you got to follow the momentum mainly
with this AI data center build out. Now
we did confirm a breakdown. Now it took
a while and it confirmed right here on
this candle on Friday June 26th. It's
because we broke down here on this
candle the 23rd. We didn't put in a
lower close underneath this candle,
maintained price action closing
underneath this inclining trendline all
throughout this time, and then on Friday
closed underneath that Tuesday low,
finally confirming. So, what that does
is it makes this trendline resistance, a
more major level of resistance. The
problem is though, notice how sharply
inclined this trendline is. We could
easily meander right back up to this
trendline to catch resistance, and also
make a brand new all-time high. So,
again, this is kind of like watching ice
break in a big lake. These are starting
to show breaks of the ice, breaks of the
current trend. It doesn't mean we can't
go recapture trend and get back above
it, or even get all-time highs and still
remain broken. However, it's starting to
show cracks in the ice that are
developing all the while a left shoulder
and a head is starting to develop. So,
as long as price doesn't get above that
head, we now are can be talking about a
potential head and shoulders pattern
developing on the SMH. We'll be keeping
a close eye on that. Next up and briefly
into the 10-year yield, and you see the
10-year yield declining pretty nicely
over the last several trading days going
into the jobs report. So, I'm curious to
see how this is going to react. Next
support down here at 4.307.
Near-term resistance is going to be up
here at 4.425, but I'm mainly concerned
with this trendline that you see here
from this major pivot back on March
27th. That's at 4.484%.
Once we get above that, then the market
start getting a little bit more dicey
with higher rates. And so, that's really
the threshold I'll be watching going
into this week's jobs reports. Uh next
up into gold, down almost 2% today, down
1.78. Notice though, it is working its
way with consolidating now underneath
this inclining trendline in which it
broke, but it has not yet confirmed.
Notice, we have not closed underneath
this candle that broke on June 24th. So
we could easily come right back up to
this trend line and head further above,
in which case resistance will be right
here $4,279.
Near-term support on gold should this
bearish consolidation break is down here
at $3,886.
Next up into silver. Silver, as you see
here, also behaving similarly to gold
except we're starting to elevate a
little bit more. Also, the lower wicks
on this timeframe are showing me the
buyers are trying to support this range
right here around $56 on silver. So be
mindful of that. Notice also the daily
RSI is starting to poke up a little bit,
implying that the low is in. So buyers
are really actively defending this
level. Could see a near-term bounce up
to the $64 range on silver.
However, if this sideways consolidation
continues for the next three to four
trading days, even with wicks developing
on the bottom, that could end up then
tipping this bearish consolidation to
play out and come down to the next
support at 4972. As you guys may recall,
I'm really interested in picking up some
physical silver. Haven't yet pulled the
trigger. Waiting for price to at least
touch this 5509 if not pierce it before
I start picking up just a little bit of
physical silver.
Next up into US oil. US oil has been
very sticky, guys. It's been sticky on
these support levels that you see here.
This previous support, which is now
resistance at 7556,
was going to be due for a bounce, but we
just didn't get that much of a bounce
pushing us up to the $78 range before
price plunged down and now is putting in
consolidation on top of this level of
support, which is a declining trend line
taken all the way back here, as you can
see, from this July 1st, 2024 pivot
connecting over the another major pivots
that occurred on the chart. Notice also
when we broke above it, this wick
actually caught support before price
accelerated up. Now we simply retraced
all the way back down to that trend line
and are catching support on it. That's
how technical analysis works. And guys,
if you don't know, now is your time to
learn technical analysis. All of our
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year, so now's your time. Take advantage
while you've got some time to study up
on the charts. We got a holiday this
weekend. There's an extra day while the
markets are closed, so you can get your
head right back in the game and learn
some new techniques. Anyway, back into
this chart. So,
much like how I was saying on gold, if
we continue chopping sideways right here
on this level, we likely are due to
break it, all right? Then the next level
of support down here at 6233. Should we
get a little pop up like silver's trying
to do, resistance at 7556.
Next up into nat gas. Nat gas confirmed
its breakdown just this other week on
Tuesday with a close underneath Monday
of this inclining trend line, and then a
further push down there on
Tuesday the 23rd. So, we see since then,
this is how price breaks down from trend
lines, folks. Much like what I
anticipate with the SMH, when we confirm
the breakdown, notice the next rebound
day and the subsequent two trading days
went back up and tested that trend line
from which it broke from. It did not get
back above, otherwise this would have
been a failed break down. And you could
see though, this is how technical
analysis should work on inclining trend
lines that do end up confirming a break.
They give you an opportunity to get back
in, short this from a higher level, then
look at this kerplunk today, down 3.54%.
Now, if we break this range of low
pivots, next support at 303 followed by
this pivot highs level of support right
here at $2.90.
Next up into Bitcoin. Bitcoin also put
it in bears consolidation right here at
the lows of the chart. Uh but these
wicks are starting to get larger and at
least they prevalent, guys. So, you can
tell buyers are doing their best to
defend a breach of $60,000 on Bitcoin.
If they're capable of doing so, next
resistance $63,577.
I'm still waiting for the head and
shoulders pattern to play out from this
weekly time frame chart down here sub
$40,000 on Bitcoin. And I'll remind you
later this week we'll go through a cycle
analysis on Bitcoin that shows you this
likely should be concluding with the
selling pressure within the next two to
three months. Uh next up into Apple.
Apple, as you see here, wanted to check
Apple as we've had some pretty steep
declines. Now, Apple was in the news the
other week because they said that
they're going to be increasing their
cost for their laptops and devices that
require memory since the memory surge
has just been out of control as we all
know fully
on the charts of Micron's uh Sandisk,
STX, you name it.
So, since we've had a very nice bear
flag form. Here was the news on the
increased cost. We plunged through this
level of support at 281.55. The
following day, got right back above it.
Then today, we are closing right back on
this resistance. Notice where each one
of these bounces have taken us to. The
previous all-time high resistance pivot
point. It's amazing how charts interact
and they react to their past uh price
movements and past significant pivots on
charts. It's just incredible to behold
every single day. However, now we find
ourselves right back here in contention
with the support level. So, if this
level breaks, as you see here, we've
already done it before, but we didn't
quite get down to this next level of
support at 273.09.
Following that would be the 50% area of
the parallel channel, which is at $267.
But this has been a very nice decline.
Watch for this level to be tagged and or
pierced in the near future. It still
should provide decent support as you see
all of these other pivots across the
screen on Apple indicating there's a lot
of buyers to support that price action.
Uh next up, I want to put a chart on
your radar, guys, with Spotify.
Something I noticed in research over the
last week, we are starting to form an
inverse head and shoulders pattern here
on Spotify. Now, today, yes, we did have
a positive day, but we did give up some
decent gains that were helping to form
the right shoulder of this chart. Now,
guys, just because it's starting to form
a pattern doesn't mean it has yet
triggered, all right? Price action needs
to close above the neckline at $522
and then that will trigger the measured
move pattern target up here to $648.50.
Now, talking, that's around $200 from
current price. Now, again, guys, I don't
want to have you guys jump the gun. This
This pattern triggers at the neckline.
Now, if you want to get in now, so be
it. Uh this pattern would negate itself
with any sort of price action and
closing underneath the low range of this
head. So, at least you've got your area
to stop out. Now, if price action does
continue plummeting on Spotify and
doesn't form that inverse head and
shoulders pattern, you can see this
other inclining trendline long-term
coming all the way back here from a
pivot low in December of 2022, that
level of support will be under $400 at
$375.06.
And if price does get down there, that
head and shoulders pattern is negated
and we'd have to re-evaluate from that
point out. Uh next up, into Roblox. Look
at this nice pop here on Roblox, up
14.26%
doing a great job today closing above
this declining trendline insinuating a
potential near-term breakout is on the
charts here for Roblox. Now, tomorrow,
for any bulls or breakout fans, you want
to see price get above the high here,
55.35,
and close, then that would make this
declining trend line a buying
opportunity if price retraces to it at
$52.82.
So, that's a qualifying potential trade,
so pay attention tomorrow. If we can get
that and the retrace, I anticipate
Roblox to march its way back up to
$66.21.
And if it really starts getting its
momentum going, its destination is going
to be on this trend line that originates
all the way back from May of 2024. And
if I extend this out for you, you could
see here how price action clearly is
separated from this top half and this
lower half that where prices just bled
on out on the low side. So, again, first
things first, get a confirm above this
tomorrow, then that opens up and
increases probabilities for more higher
price action on Roblox for a stop
$66.21,
followed by potentially retesting the
$80 threshold, which does make sense as
we have some resistance right here in
that range. Lastly, guys, I've got a uh
viewer request from Charles Vignault.
Thank you guys so much for all your
comments and feedback. Plus, thank you
guys for participating and watching here
with me because we can go through your
special charts, give you updates on the
general markets to keep you guys on the
right side of a trade. So, let's jump
into this chart real quick. I've got SMR
NewScale Power Corp on the weekly time
frame. Look how beautiful technical
analysis works. This weekly time frame
printed a weekly topping tail back here
in October of 2025, uh illustrating and
foreshadowing this significant decline
that we've had. And since then, we've
had a move all the way down sub $10.
Now, you see price has put a bull flag
pattern up on the weekly time frame, all
still staying within this one candle
from April 13th. That's the positive.
The negative here is if it put in a
weekly close under this candle, we're
going to be coming down and testing this
declining trend line again down here at
$4.78.
Need to watch this one green candle low
at $8.85.
If we maintain above that, we've got a
good shot of getting up above this
bullish consolidation, where I think the
ultimate destination on something like
this, much like on the Roblox chart, is
going to be up here on this inclining
trend line right around 2263,
which would be the high pivots that
occurred back here in November and
December of last year. mindful of that
one big green candle on March or pardon
me, April 13th. That should at least
steer you in the right direction for the
near term. All right, guys, that wraps
up trading the close. Guys, we'll be
here all week long even though it's a
shortened week, we're going to have
episodes Monday through Thursday, plus
I'm going to guest host
Garry's show in the morning, the Trading
Game Plan on Thursday morning. Look
forward to it. Until then, guys, thank
you again for watching and we'll see you
next time on the charts. Take care,
everybody.