The Bubble Continues To Inflate, Surpassing Dot-Com As All Systems Go, Trouble Or Just The Start?

My name is Gareth Soloway and I was a
losing trader until I mastered technical
analysis. Logic and charts beat hypes
and narratives [music] every time. Now I
teach investors the same techniques that
made me a multi-millionaire. [music]
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.
We have a lot to discuss. Remember the
stock market was closed for 3 days. The
futures were open on Friday and were in
sell mode after really the threats and
potential closure of the Strait of
Hormuz came back on the radar. So you
had the Iranians saying we were going to
we're closing the strait. The US was
saying no, you're not. Then over the
weekend the president's Truth Social
posted multiple threats about rebombing
Iran. And then by the end of the
weekend, and this seems to always
happen, is by the end of the weekend the
spin is put on it and hey, negotiations
went great. So everything is good. So
the markets went from being down as much
as 1 and 1/2% on the S&P, even more on
the NASDAQ in the overnight, to now
basically flat on the day. Amazing stuff
to watch how again the media and kind of
the spin is always put on just before
the stock market reopens. So therefore
the bubble can continue to expand and
who knows how big it can ultimately get.
So let's take a look here at the S&P
futures. Here you have them. This was
Friday's price action. It was generally
a higher day, but a lot of chop. This
was uh or I should say this was Thursday
action. This was Friday on the futures.
A big tumble as things again did not
look so good between the US and Iran and
Iran. And And we saw over that period
and into Sunday night and coming into
Monday, the market slowly recovered on
more positive headlines coming out about
negotiations. Is anything settled? Is
there a deal done? The answer is no.
That 60-day window is still going, but
again, it's always about the spin. We
have to keep that in mind. All right,
couple other things. I've also noticed
that even when the futures are down,
there's always a tidbit of positive AI
news to slip out into the market. We saw
that last night when the CEO of Intel
came out with some positive comments.
So, last night Intel was trading up
sharply in the overnight. It's still up
a little bit today, but again, these
commentaries from government-owned
companies like Intel at this point that
kind of push that, "Oh my goodness, we
could grow 10x. We could do this. We
could do that." It gets the AI trade and
the kind of the animal spirits all
together running again. And so, we see a
lot of the AI stocks up today. Some
aren't, but again, a lot of the memory
stocks and obviously Intel is higher
this morning. So, let's take a look
here. So, number one, we have the oil
trade. Notice here, guys, this is your
daily candle on oil. If we flip over
here,
this is where oil opened on Sunday night
going into today, and you can see again,
it was higher, sharply higher trading
north of $78 per barrel. And then
obviously, the spin came out in the
overnight and oil fell. Is now negative
on the session. Look at that, folks.
Negative on the session on oil. Now
again, if we do see a further breakdown
on oil, technical analysis suggests the
big level to watch would be this gap
fill. There's a big gap in the chart on
oil right here. The level is 67.25.
That would be major support. I'm
skeptical we'll get there in the near
term, mainly because I look at it like
you still have all these strategic
reserves that got depleted. Are
countries really going to wait to buy
any oil until we get back to 67? Or what
if the deal does really fall apart
between the US and Iran and oil spikes
back to 100? And so they're probably
already taking advantage of this price
and beginning to fill their strategic
reserves. But the problem is, I mean,
we're talking hundreds of millions of
barrels here. It's not going to happen
overnight and therefore there's going to
be a longer-lasting bid, probably in
this mid-ish 70s range on oil for the
foreseeable future. All right. We
mentioned Intel. You can see again, I
don't have the overnight data, but Intel
again gapping up at 4:00 a.m. when the
pre-market began, faded a little bit,
but now is pushing back up. And like I
said again, leave it to a
government-partially-owned
company to just continue to say
something positive. Now, remember last
Thursday, markets were down and then
Intel well, it was more the president.
It was after, remember, the the Federal
Reserve came out and kind of was more
hawkish, the market sold off nasty on
Friday, or I should say on Wednesday
afternoon, and then Wednesday night into
Thursday, the last trading day before
the three-day weekend, we heard from the
president, from the president, mind you,
that two publicly traded companies had
reached a deal, Intel and Apple, and
therefore that juiced the markets on
Friday. And then again, like I said,
overnight last night, the CEO came out
with some bullish comments as well. So,
Intel trading up. If we look at Intel,
it is basically trading at an all-time
high. Valuation makes almost no sense
unless you factor in the favoring of the
US government. The only thing I would
look at here on the chart is you could
make a case that you have a little bit
of an up-sloping trendline right here.
And then if we bring that up, this could
be a little day-tradable level right
around this 138 to 140 level, but more
than likely the bigger level will be up
in this range if we continue up. That's
around the 150 even number. And again,
that would be a classic parallel
resistance level per technical analysis.
Okay.
Other stocks in motion today, we are
seeing Taiwan Semi and I I'm putting up
this chart on purpose, folks. More and
more of these AI stocks are just
breaking above major major trend lines.
Like historically, if you saw this trend
line, eight out of every 10 times it hit
this line, you would see a pullback. And
you've seen it, right? One here, pulled
back. Two, pulled back. Three, pulled
back. Today, it's pushing above it. Now,
we don't know where Taiwan Semi will
end, but it does show you that generally
this is logic based when you hit a trend
line. When you break through something
like this at all-time highs, it shows
you the logic or emotional response from
investors. So again, you definitely have
that kind of what Greenspan and and by
the way, Greenspan passed away today at
the age of 100. Um he was one of the
legendary Fed chairs. You can argue
whether it was a positive or negative,
obviously. But for the most part, he was
the one that coined that term irrational
exuberance going into the top on the
dot-com bubble. Um and I would
definitely say you have that in some of
these stocks at this point. Anytime you
have a sector, by the way, anytime you
have one sector making up 40 to 50% of
the entire market cap of the stock
market in the US, it probably tells you
things are a little bit lopsided. The
big question we don't know, and I don't
even know this, is when will it end? You
know, it will end nasty. It will end
with a nasty collapse, probably dot-com
like, 75% or so, but we don't know when
that will be. How much higher can we go
on these stocks before that occurs?
Other names on my radar today are AMAT,
Applied Materials. The reason this is
intriguing to me is you had one, two,
three topping tails in a row. Topping
tails are bearish reversal signals. It
signals institutional money is dumping
into retail buying, FOMO buying. That
creates the long tail or wick on the
top. The only difference maker, and I
did a video on my YouTube this weekend
from premium members on YouTube, was
that this right here was a strong
topping tail versus this was a weak
topping tail, weak topping tail. And so
again, differentiating between weak
topping tails and strong topping tails
incredibly, incredibly important. This
one was a strong topping tail. So now we
need to see, does it hold or get
negated? To negate a topping tail, it
would be any close above the topping
tail high on that time frame, and that
would be just around that 639, 640 level
today. Premarket it is trading just
below 635.
All right, stocks that I'm intrigued by,
Apple. Apple is making a bear flag
formation. So remember, Apple had the
big sell-off after their WWDC event
where they really didn't blow the market
away with anything AI, and you could see
Apple coming down, and then this is what
we would consider to be an in spirit of
bear flag. Eventually that bear flag you
would expect to kind of break down here
and make another move to the downside.
Now, I don't know when that'll be. It is
trading, Apple is trading lower today on
the day by just a little bit, but again,
just keep in mind that's a bearish
pattern per technical analysis. All
right, couple other charts. I continue
to like Microsoft. Microsoft trading
down slightly today. And by the way,
pretty much anything that's not AI is
trading down today. So, let's, you know,
call a spade a spade here. The market
was down, like I said, 1 and 1/2% in the
overnight. The AI stocks are doing the
heavy lifting. Because the AI stocks
make up 40 plus percent of the total
stock market market cap, it is going to
lift the stock market up. But, if you
look at the internals of the market,
like every other stock minus this
handful, this 20 30 30 stocks in total
out of the S&P 500 or the Russell 2000
or whatever you want to look at, a
majority of them are down. So, it is
kind of a concerning thing, right? You
generally bull markets show strength by
being broad. When you have one sector
leading it, it makes the market very
vulnerable because if we do see a
correction in that one sector, then it
takes the whole market down just like
it's taken the market up. Now, listen,
we could argue that, "Hey, listen, the
AI stocks will never correct." I
disagree with that, but that would be
the only narrative to kind of say, "Oh,
well, you know, it's going to continue
to go on ad nauseam." All right. Uh so,
Microsoft, I continue to like this on
the on the upside here. One of my
favorites on this. If we look at other
names as well, like Amazon, Amazon is
down as well. If we look at Google,
Google is down. Look at Google down
here. From the pre-mark from Friday of
Thursday's close, look at where it's
trading. It's definitely down. And so,
again, my point is even the Magnificent
Seven, unless they are specifically AI,
they are down. What's leading the market
today? Micron. Micron reports earnings
Wednesday after the close. Micron's up
another 3 to 4% today. Um that stock,
again, all-time highs, RSI's to the
moon. Speaking of which, SanDisk, the
monthly RSI is now over 99. I've never
seen that in my life in my 27-year
career. I've never seen an RSI that
close to 100. 100 is the max it can ever
go. Now again, what is the RSI? It's the
relative strength index. And generally
when you get above 70, it says it's
overbought.
80, it's very overbought. 90, it's
extremely overbought. You get to 99 and
it's a
correction of 30% waiting to happen. And
again, I'm not going to pretend to sit
here and say it's today or next week or
next month. I don't know, but an RSI
that high is a ticking time bomb ready
to implode or explode. All right. Couple
other things to go over here as we
continue through. Again, we can look at
Micron real quick and Micron trading
just under 1,200 up in this range.
Probably has momentum into earnings as
people are assuming the earnings are
going to be fantastic. The one caution I
would give here is that keep in mind if
people assume the earnings are going to
be good and the stock rallies up into
earnings, it means it's factoring in
exceptional earnings and they're going
to have to report even better than
exceptional to get the stock up. In
other words, if it rallies up into
earnings, the bar is being raised in
real time that they have to come out and
just blow it out of the water. Okay.
SanDisk, we talked about that. Here you
have it. Again, this is another example
of a parallel that right now we are
above based on the pre-market data. I'll
show you that monthly RSI here, which is
absolutely incredible. RSI, and that's
not including today's price action, is
at 99.22 on
SanDisk. And today it'll probably open
up near 99.5
based on the momentum there. Now on the
other side of it, look at this guys.
This is intriguing. While the 99 level
on the RSI, and I didn't mean to get
into teaching like this, but I love
teaching, guys. It's so It's so amazing
to me. It's exciting to me. But, when we
look at the RSI on the weekly chart, we
see price going up, but look, negative
divergence starting to build, and that's
another warning sign for SanDisk. So,
not only do you have an RSI on the
monthly at 99.22,
but you have a negative divergence
developing. Now, let's take a look at
the daily chart. Look at the daily. The
daily absolutely has negative divergence
as well, and that again continues to be
warning signs for something like
SanDisk. And listen, you know, the key
is
we know memory prices are up. In fact,
Apple had to announce late last week
that they were raising the iPhone price
because prices are up. But, we've heard
that the SanDisk and the Microns,
they're booked out for orders for
multiple years. They can't They don't
have any production capacity left. So,
the question is, are they raising prices
still for for deals that had already
been inked? Okay, well, then it makes
sense. Their earnings could be better.
But, if not, then it's really
overpricing. And by the way, we do see
multiple
factories in China, Taiwan, even in the
US being built to manufacture the same
memory that these all produce. So, there
will be a glut down the road. The
question is again, when does that bubble
burst? We'll watch and see. All right,
let's get into gold today. Gold uh on
Friday was down sharply uh overnight
opening lower. It is bouncing back, but
it is still lower.
So, gold here, what we see is you have
this wedge pattern here developing
beautiful move down here. Classic going
back to this high pivot, low pivot, low
pivot, low pivot, and low pivot. This is
what I'm following. So, we have support
around 4,000 on on gold, and we have
resistance around 3375
or so.
I'm watching to see which way it breaks.
Does it break here? Okay, well, then it
goes potentially back to 3,500. If it
breaks here, it probably won't go
straight up because you have a lot of
resistance along the way, but you could
eventually see new all-time highs on
gold. Silver
struggling to hold this 66 to 64 level,
but it is still holding. So, we got to
give it credit. Right now, it is still
holding, and I'll keep my eyes on that.
But, certainly an interesting chart
there. And then, natural gas, still
watching the daily 200 moving average.
We're still stuck below, but it keeps
kind of push up. And again, we talked
about that cup and handle pattern here
that could signal an eventual breakout
on natural gas. But, right now, not much
that I am seeing. All right. Lastly,
Bitcoin. Bitcoin, obviously, over the
weekend came in
uh on the back of of what we've been
seeing here. I can get rid of that 200
MA. We'll talk about that if it gets
closer. But, good push on Bitcoin uh as
the stock market has recovered. But, the
key is now going to be this high at
67,250.
You got to get up and take that out. And
one thing I'm watching is you can
definitely draw a trend line through
these lows. You do not want to see
Bitcoin break below this trend line
around 63,200.
It likely will head back to the double
bottom here and potentially break even
lower. So, watch this up ascending trend
line on the charts.
So, there's a lot going on. We have PCE
data this week. So, that's inflation
data. As I mentioned, Micron earnings
are Wednesday after the close. All eyes
remain also on the Kospi in in South
Korea, the the their market because
obviously, two stocks make up over 50%
of their stock market there, which is
just insane. Um and obviously, the
Nikkei. The Nikkei is absolutely
important as well. So, believe it or
not, every night at 8:00 p.m. my time, I
tune in to see where the Nikkei's
trading, the Kospi, and then keep an eye
on the futures and to see how things are
shaping up. If those markets go higher,
generally it's because of the AI trade
going higher, which then helps the US
market AI trade go higher, which lifts
our boat as well. All right, you guys
have a great rest of your day. Thank you
so much for tuning in. I'll talk to you
soon. Take care.