Semi Trade Unwind? Key Moving Average Broken, Engulfing Reversal Warning...Here's The Analysis

My name is Gareth Soloway [music]
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 [music]
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
and of course we're going to dive into
the data and the charts to see where the
markets are heading. All of the stock
market, we'll look at crypto as well as
the precious metals and even taking a
look at where the dollar and 10-year
yields are currently trading and where
they're likely headed. All right. Now
let's get right into the mix here today.
We have the S&P futures grinding higher.
Remember last week was a pretty rough
week specifically for AI and
semiconductor stocks. They began to
correct. What's interesting is that
Friday actually saw the S&P close flat
on the day while the Nasdaq took a
bigger hit. Now we can see today the S&P
is grinding higher again. Couple reasons
for that. So number one, just after the
stock market closed on Friday and I'm
sorry I can't even say this with a
straight face, is that we heard that the
US was striking Iran. So stock market
closes,
news hits that we're striking Iran on
Friday. Then we apparently are firing
missiles back and forth with Iran all
weekend long. Come Sunday night just
before the futures open and there's an
agreement to halt hostilities and
missile attacks and they'll start
talking again this week. So again, what
this tells us from a technical
data-driven perspective is that
President Trump continues to make every
decision
based on what the stock market is doing
or when it is open and when it is
closed. Now that gives us good
information going forward to understand
when things might occur if they are bad
and when they might also halt. So,
interesting on that front. Um overall,
oil is flatish on the day, kind of
chopping around just a little bit. But,
like I said, S&P futures are trending
neutral to higher. Now, the other factor
here is this is a holiday pre-week. What
do I mean by that? Well, we have Friday,
the market are closed on July 3rd, and
that's in observance of the July 4th
holiday on Saturday, this coming
Saturday here. But, in general,
institutional money, and I know this
from being in the institutional game, it
tends to take off the entire week. When
there's a short week,
big institutional money is going to
leave, whether they're left already this
weekend or if they're leaving Monday or
Tuesday, they tend to take more time
off. This means that retail has the
ability to control the markets just a
little bit more than usual with their
volume. And therefore, it gives a
neutral to upside bias. One thing I
always like to say is that retail, the
masses, are generally going to be
bullish, right? They're going to be
constantly buying. Not only are they
brainwashed by institutions to just buy
every dip and continue to go long to be
exit liquidity, no matter what, but
also, remember, if you're depressed, if
you think negatively, what do we do? We
medicate you, right? The The The gen The
pharmaceuticals, they they come out and
they give you something to be positive.
So, there just human nature has a
tendency to be positive, and it always
kind of keeps that underlying flow. So,
my my thesis of this is that while I
think the markets have broken key
levels, and we're going to look at a
couple key levels in just a minute, I do
think that on a holiday week, it's very
likely we float neutral to higher. We
also know that the president, like I
said, he likes to have the market going
up into these special days, like the
250th birthday of the United States. All
right. So, back to the charts we go with
futures neutral to higher. Let's flip
over to the S&P 500 here. The S&P 500 is
still holding its major support. Now,
remember, we do have a low, lower low,
high, and an unconfirmed lower high. To
confirm this lower high, we need to take
out this low right here. If we do that,
we also break back within this bigger
parallel channel that goes back to the
COVID lows. So, there's a lot going on
here, but the key takeaway is that as of
now, we have not broken back below this
level. Now, one thing to remember as a
technician is that the biggest moves
come from failed moves. So, right now,
we are holding a breakout, right? We had
a breakout of this parallel channel. We
came back. We tested support. We bounced
up, making a lower low, of course. Now,
we've come back in kissing that line
again. Do we hold it, or at some point
do we break? If we break, remember what
happens. The biggest moves come from
failed moves. That opens the door if we
get back below here to a much bigger
corrective move. Now, there's something
else I want to show you guys on the
Nasdaq composite. All right. So, if we
go to the Nasdaq composite daily chart,
number one, we didn't get a lower low
here yet, but we basically got a double
bottom. And this shows us that the tech
sector is a little bit weaker. But, if
we throw on our 50 moving average, this
is important, guys. So, what we see here
on the 50 moving average is that when we
break significantly below the 50 MA,
there's usually a much bigger drop
versus other periods where we kind of
just chop around. So, take a look at
this. Here we were hopping along the
daily moving average 50 moving average.
We broke. What happens? A much bigger
correction. This was your 2025 April
drop. Now, notice how right here we
gapped above it. As soon as we got above
it, then we ran up. Then we chopped
around here, we chopped around, we broke
below it, and look, then we got our
bigger corrective move. Then, what
happens here? We gap back above the the
50 MA, and we run all the way back up.
My point of showing this is that here
you have a hit, it held, but look, they
gapped us just like here, where they
gapped us above, they gapped us below.
Historically, when we get below and we
don't recapture it within a day or two,
we see that there's a much bigger
corrective move, ala right here, right?
Big drop, and right over here. Well, all
in all, what do we have now? We have a
break of the 50. Now, granted, maybe
they can rescue us, but what I'm
watching this week is if we do float up,
and I'm just extending this out a little
bit, this moving average, if we do float
up, do we recapture it, or do we do what
we did right here, where we broke,
went up, kind of tested the underbelly,
and then started our bigger sell-off,
right? And then same thing here, where
we never really retested, we just
collapsed all the way down. So, the 50
MA for me
is essentially a moving average that
guides me to when the markets are in a
bullish mode or a bearish mode in the
near term. The 50 MA only really tells
me near term. It tells me the bias based
on, let's say, the next month or so. And
that's why I'm focusing in here. Do we
have something bigger that's going to
trigger a bigger drawdown in the stock
market with this break of the 50 MA?
Again, I'm watching this week. Does it
retrace, but not get back above, in
which case, okay, after July 4th, I
would expect another bigger down move,
much ala this one here. Or if they
recapture it, maybe it's more like this
little blip here, or this little blip
here. Which one ultimately is it? All
right. So, again, little things like
this, I just love looking at. Now, I
just educated you on something on moving
averages. I do want to talk about, just
before we get into more charts, that
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These, again, have the ability to change
your financial future. All right. Back
to the charts we go. Let's move on. The
dollar,
remember the US dollar was hammering on
resistance right up here. As of now,
it's correcting and pulling back. Now,
this doesn't mean it can't break out in
the future. We got to watch to see what
happens here, but right now, it is
getting a drawdown. Support, there's
going to be a little bit of support
right here now. Notice how we broke, so
high pivot, high pivot's right here,
here. We broke above it. That now
becomes a minor support. Now, it's not
major, because again, we've kind of been
in this choppy zone for quite some time,
but it will be a minor support uh
drawdown to about 100.4
on the DXY. The 10-year yield, basically
flat on the day. The 10-year yield has
come in significantly here over the last
month or so, and that really coincided
with oil starting to come back in.
Looking at crude oil, you could see
again, crude continues to kind of just
sit sideways for the last couple days
after it fell all the way back down as
again, you know, markets are looking at
everything going on with Iran and
saying, "Yeah, sure, there's a few
missiles flying back and forth, but
overall, they don't believe that it's
going to escalate to a shutdown or more
major conflict, at least for now." They
don't believe that. And that's just
showing us in the chart of oil, right?
What oil is doing. So, again, I do think
there's good support here, um even if it
fills the gap around 67. I am slightly
bullish. Like if I had to choose bullish
or
uh or bearish bias, we're so close to
major support around between 67 and 70,
plus their strategic reserves need to be
refilled, that it makes sense that we
could be due at some point for a little
reversion trade. I don't think there's a
lot of upside here. I'm kind of eyeing
this $80 per barrel level, but again,
that's not a bad gain on oil in the near
term if it gets there. SpaceX, as of
Friday evening, got announced that it
was being added to the Nasdaq 100. So,
again, it is up a little bit today, but
what's interesting about SpaceX is that
usually you would see a bigger jump in
the price of something being added to
the Nasdaq 100. We're really not seeing
that. Yes, it's up today, but it's still
basically at the lows of since it became
an IPO. And I think that's very telling
about the change in character in the
market, right? I mean, it used to be I
still remember when Robinhood got added
or even the rumor of Robinhood getting
added to the S&P, it was like up
massively, like 10 20% in a day. Now,
you're getting like 3% moves out of
SpaceX for being added to the Nasdaq.
Just something to pay attention to. This
is a change in character in the market
structure. All right. Microsoft, I've
been a big fan of for the last week or
so, had a huge bounce on Friday, again
up today trading around $380.
Again, good quality name beaten down,
getting a technical bounce, bouncing
again today. I'm still optimistic that
we should head back to this area here.
And you can see why I'm choosing that
area is that if you look, you have your
pivot low, pivot low, and then we broke
and we made a pivot high. So, if we do
rally up, this is the logical zone
around $400
where Microsoft should meet resistance.
And right now now it's I mean, in all
fairness, it's already up from 350 to
380 in the pre-market, right? Obviously,
350 was last Thursday's low, then Friday
had the big bounce and it's at 380. But,
I still think it could go to as high as
400. Oracle had an horrendous week last
week and really the last month. June was
a bad month for Oracle, dropping from
250 to $150. A $100
drop in one single month in in Oracle.
It is getting a little bit of a bounce
today. Same thing, very oversold, coming
into technical support here. And if we
just look at the charts here, I mean, it
is kind of interesting to take note, we
could make a case that again, you're
very, very close to technical support
right in here, right? If we look at the
chart here going back to the 2022 lows,
through this low, you kind of pierced it
right over here, and then low and
behold, what did we hit on Friday? That
low pivot right there. I do think Oracle
is due for a technical bounce as well.
And I think this goes along the lines
with a deleveraging or diversification
from the AI trade, right? So, we've
really started to see these AI stocks
starting to come in significantly.
Again, we're talking 20% drops um on
some of these names. I mean, even
Nvidia, you look at Nvidia and it is
bouncing a little bit today, but it
broke major technical support on Friday.
We'll see where it goes today, and it
might float up this week, but it's still
way off its highs. Broadcom, way off its
highs with a bear flag formation, small
bounce today, but ultimately that chart
tells me it's likely going lower as
well. And even if you go to some of the
memory stocks, Micron on Friday gave
back 50%
of its gains from from the earnings
move, and guess what? It's not even
trading up today. It is now down
pre-market on Micron. All right, now you
might say, "Wow, but those were so great
earnings, and their margins were just
tremendous."
Why is it trading down? Why is it
pulling back? Why isn't it going up? All
these analysts upgrading and taking out
their pom-poms and shaking them and
jumping up and down. Well, the answer is
very simple.
Smart money recognizes that this is
probably peak demand for memory, meaning
that this is as good as it's going to
get, so they're selling into it while
retail gets caught up in the pom-pom
pumping and the fist pumping and buys
in. Institutional money has more money,
therefore price is going to start to
come in. Actual liquidity is there.
There's no doubt about it. Crazy stuff,
guys. All right? Um looking at a couple
of these other ones here, if we go on to
more, we can see here that we have uh
STX, another great example. Look at the
drop on this thing from last the gap up
on Micron earnings to a 1,112,
closed at 900 on Friday, bouncing just a
little bit, but I mean, that's a huge
20% drawdown in 2 days of price. And
again, these are going to This is the
kind of the thesis, right? I mean, this
is what I've been saying for the last
week or so is that the Microsoft's, the
plays that you've seen like Meta, even
Meta, and I'm By the way, I'm not saying
I'm bullish on Meta or Microsoft
long-term. Remember, I'm a swing trader,
day trader as well, so I'm in and out in
days or weeks, but right now, I feel
much more comfortable in a Microsoft or
an Adobe or a team or a you you or a
Oracle than I do being long a Micron.
Now, you could say, "Well, but
valuation." Yeah, but valuation is
always backward-looking. Even whatever
the company says. I mean, how many times
Think about Oracle. Oracle when it
topped at its all-time highs about
little less than a year ago, they came
out with the most robust guidance ever.
Like, holy cow, the stock was up 40% on
earnings, basically touching a
trillion-dollar valuation. And that was
the high. And it's literally fallen 50%
from there. So, we always have to
remember that is that the emotional
triggers within us get us into trouble
while looking at thing logically looking
at them logically keeps us much more
grounded in making the right decision.
All right, on to Tesla. Tesla tagged a
key trend line of support on Friday.
This is a very important level for
Tesla. Keep an eye on it here, guys. If
it breaks the 370 level and confirms,
that is very problematic for the stock.
Gold pulling back today, had a couple
bounce days. Again, this is your key
support around 3,900 to 4,000.
If that breaks, it's headed to 3,600 to
3,500
on gold. And silver, small down day
today. This could be a bear flag
formation. And again, it now this
Remember the $64 support that we had?
Even though it says resistance, it's
changed into resistance now, but for the
longest time I was saying, "All right,
guys, this is support. Uh-oh, it broke.
What does support become? It becomes
resistance." And it's now resistance.
So, you're going to have a big fight to
get back above 64. Path of least
resistance is 54 and then $50 on silver.
I know people don't like to hear it. I
love it because I want to buy.
If you're someone who didn't jump in at
$100 or 110 or 120, this is awesome.
I mean, I love long-term my my metal
forecasts are very bullish. I mean, how
do you not be bullish? I always say
this, but it's like our government just
prints more money and spends more money,
runs up the debt, all of these factors.
The Fed, sure people think Kevin Warsh
is hawkish, I don't buy it one bit. Uh
Trump would not have appointed him if he
was going to be super hawkish. So all of
those factors mean the physical
things are going to be more valuable
over the long term. But in the near
term, we know near term emotion rules.
And right now emotion is on the bearish
side of silver and I still don't think
it's flushed out all the weak hands in
it. All right, couple other things we
looked at oil already. Nat gas is coming
in this morning. Still a general cup and
handle. I still have not gone long on
this trade. Uh I'm not liking it quite
enough yet. I want to see a breakout
before I jump on board. And Bitcoin
here, Bitcoin is getting a small
technical bounce. This morning
MicroStrategy MSTR reported that they
are forming a US dollar reserve so that
they can pay their dividends. The stock
jumping in the pre-market. And there's
been a lot of speculation that
MicroStrategy is in some trouble, but
this is making people feel a little bit
more comfortable with where
MicroStrategy or I should say strategy
is now um in regards to their dividend.
STRC, I believe is the symbol on that
dividend paying premium or or class A
stock or whatever it is. All right, so
again with that Bitcoin catching a
little bit of a bid today, moving up.
And again, you can see for the most part
it's still holding technical support. So
again, it's not breaking down just yet.
There's this trend line right here that
I'm following, but it could be making a
bear flag. So we need to monitor this.
As long as it holds this kind of 58 and
change level and doesn't confirm below,
I would remain neutral to bullish. But
the second it breaks and confirms here,
it's probably headed down to the low 50s
or even sub 50. All right, guys. Lastly,
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guys, on that note I am going to bid you
farewell. Thank you so much for tuning
in and supporting Verified Investing.
Let's go have a great Monday. Take care.