This week's trades, market movers, and
technical levels [music] that count,
wrapped up with clarity and precision.
This is weekly wrap-up with Verified
Investing.
>> Hey folks, welcome to the weekly
wrap-up. My name is Gareth Soloway,
chief market strategist here at
verifiedinvesting.com.
And as always, I'm here on a Friday
after the stock market has closed to
cover all the key technical levels and
how the week went. Listen, this week was
a rough week overall for the stock
market, specifically technology.
Technology, led by semiconductors, got
absolutely annihilated. I still remember
when Micron had its earnings, people
said, "Oh, this is going to go up
forever." It never does. There's always
a bubble to burst, and we have now seen
many of these semiconductors collapse
over 30%, some even as much as 45 to 50%
down. Now, the positive is, for me as a
technician, I was doing a lot of buying
early this morning. I've even taken some
profits with members of Smart Money
Stocks and ETFs on some of these bounces
in semiconductors. And I actually think
that many of them are at or close to
bounce levels. Now, specifically the
term bounce, it doesn't mean new
all-time highs. I think the top is in,
the cycle high is in for these. I think
we're going to eventually go down even
more, but at least in the near term,
there's an opportunity to be had. Let's
take a look at the S&P. We'll get to the
semiconductors in just a minute. This
was your intraday action. So, you can
see markets opened lower, sharply lower,
had this huge rally to the upside, then
pulled back, tried again to break this
recent high from the morning period, and
look, it couldn't, right? So, just on an
intraday basis, how interesting is that
to see that the market again hit this
high after this big surge, had a
pullback, and then really for the next
couple hours tried to break above it and
failed. When we fail at a level, what
happens? The market, or in this case the
S&P, finds the path of least resistance.
Which way is the path of least
resistance? Is it through the resistance
or is it a fade back down? And that's
exactly what it is. The path of least
resistance, it's unable to break through
the wall, so it wants to go back down.
By the end of the day, the S&P ended
down 1% or so for the trading session.
And really the S&P throughout the course
of the week had been chopping sideways.
Now, why was the S&P somewhat stronger
than the Nasdaq? And the answer is
simple, right? You have the S&P with 500
stocks and therefore it's very
diversified. The Nasdaq is much more
weighted towards the semiconductor
trade, which was in collapse mode
basically all week long. I mean, we're
talking about SanDisk down over a
thousand dollars from the recent highs
of just three weeks ago. I mean, these
are incredible drops. But again, when
you have incredible moves that are
unrealistic to maintain, you're going to
have massive drawdowns. It's just the
nature of how charts and cycles work.
All right. So, the key here is this,
guys. On the S&P 500, we have two
parallel lines. This one goes back to
the COVID low, 2020. This cuts through
right here, and then we cut right
through this low in 2025.
This parallel line starts at the bull
market high here. We've talked about it
all week long.
Touches this high. Notice how we broke
out above that level, tested, and it
held. Bounced up again. Comes back in.
Tests again, and it still holds. Are we
about to retest, and can it hold for a
third time down? So, let's see what
happens next week. Will the S&P attack
this trend line again? If it does, I
would say the odds are quickly
increasing of a failed breakout and
ultimate breakdown below this line. One
thing to note, the first hit of a trend
line, I would say it has about a 10 to
20% chance of breaking down. Very In
other words, almost no chance. Second
one right here, the second hit, you're
at at 30 to 40% chance of breaking.
Still less than 50% odds of it breaking
to the downside, right? So, very low
odds. But it by the time you hit here,
you're now at 50/50.
So, every time you hit a trend line, the
odds are that it increases of a break of
that trend line. Now, the thought
process here is that think about a door.
So, let's say you or I our house Our
house is on fire. Oh my goodness, this
is horrible. Um the cat Our cat or our
dog are inside, and we've got to get to
them. We've got to save them. And so, me
or you, we try to ram that door. First
hit,
it doesn't break down. Now, listen, if
you're super strong, obviously, maybe
you break it down, but for most of us,
it's going to take us one hit. It
weakens it slightly. Two hits, it
weakens it more. Maybe by the third hit,
but if not, maybe the fourth hit. Each
time we hit that door again, it
increases the odds of us breaking that
door down. The same methodology can be
applied to trend lines. Very
fascinating, at least in my opinion. All
right. So, that's where we are on the
S&P 500, and just flipping over to the
semiconductors, you can see at one point
SanDisk had rallied like 150 almost $200
to the upside, but it actually closed
back down. And what's fascinating about
SanDisk is that it actually is not at my
zone for a buy. Now, I think this is
fascinating because you had this
incredible move up, and then we broke
down, right? So, so notice how you kept
on hitting, hitting, hitting. There's
one, two, three, and then finally four
hit breaks, then it does its normal
retrace, which now this line is
resistance, and then it starts coming
down. But, the point is is next week on
SanDisk, I am going to be really
watching. If we have a gap down on
Monday, let's say, or Tuesday, and we
get within this zone of around 1285 to
1200, that is for me the high
probability bounce zone. Notice over
here and this pivot low right there. In
addition, if we do a classic Fibonacci
retrace of this, and I love the fib
tool, look at this.
Right there, 618, right in that zone.
That's the retrace. So, basically smack
in the middle of my support zone is the
Fibonacci 618, which is my favorite of
all the Fibonacci tools. And just to
give you some color on this,
when I see a massive run,
I'm always looking for the between the
50 and the 618. 50% retrace of the move
and the 618. Those are my ideal zones
for looking where to expect a bounce.
Once I see that zone, then I go to the
chart and I say, "Okay, well, where in
this area is there a Is there a pivot
point? Where is there a gap fill?" So,
I'm trying to align factors in in the
same zone. The more factors, the more
odds go in my favor that there's going
to be a bounce. You'll never get to
100%, but ultimately, again, this still
enables us to uh to put odds in our
favor very heavily. All right. Other
stocks today, STX actually had a good
bounce. This is a data storage company.
Uh and again, Seagate Technology got a
bounce. One thing to just note here,
guys, if we look at this, you can see
this pivot low right here, we draw a
trendline right across, it came down
into it, and it did get its bounce right
there. Micron, let's talk some Micron
here. And again, you know, it Micron was
basically flatish, but notice it did
have a bounce off of its lows. It tagged
the upper end of my support zone right
here. Now again, there's a two
possibilities. Number one, it tagged the
upper end, maybe it's going to bounce
next week. We'll see next week. If it
falls down, this is a I mean this is
really the ideal spot. If it could
continue down early next week and get to
$750,
the odds would probably go to about 80%
that you get a bounce off of this gap
fill right there. Huge level on Micron.
At that point, by the way, I mean Micron
from the recent high is already down 33%
at the lows today was down 36%,
but down there would be that would be a
40% drawdown on the price of Micron. And
guys,
make sure you learn how the market plays
the game or how institutions play the
game.
When Micron and SanDisk were north of
when Micron, let's say it was above
1,200
and SanDisk was over 2,000, the analysts
were upgrading it every day, you know,
with these ludicrous price targets. Oh,
we're going to upgrade SanDisk to 3,000,
to 3,500, Micron $2,000.
Those are topping signals. Learn to pay
attention to those. Those aren't Now,
the general prognosis is those trigger
an emotional response in retail
investors to chase, but you got to learn
to hold the reins back. Don't let that
chase, don't let that coax you into
trading because you become exit
liquidity. Just like SpaceX. SpaceX,
massive hype. Everyone I mean, I had
literally people friends of friends of
friends asking, "Should I Should I sell
everything and just buy SpaceX when it
becomes public?" No, don't do it. It's
There's too much hype. And what do we
see? SpaceX cratering to the downside. I
mean, this is remarkable, folks, even
for SpaceX.
Look at this chart.
I mean, down to $123
and change, even lower than the
insiders. The positive is if you buy it
today, you actually get it at a cheaper
price than the insiders. Do I think it's
still going to go lower?
Listen, it's going to bounce at some
point. But yes, do I think it's going to
go lower? I do. I think it's headed
towards a hundred bucks with many big
bounces along the way. But a hundred
dollars is where I'd actually step up
myself and play it. All right. So let's
continue on MRVL. Look at this one. This
is another chip stock. Came right into
massive support here and did get bounced
today. Ended slightly green on the day
above 188. And then there's other names
here that I'm really intrigued by. Look
at Rigetti. Rigetti down 50% into a gap
fill and near double bottom straight
line. We should see a bounce on this
next week as well. Uh one of my
favorites IonQ as well.
Hits this pivot line here. Right there.
Sure, could it go down here? Yeah, it
could. And I'm in this one just for the
record. I'm in this one today as of as
of uh yesterday and today. So right down
in this range.
And the idea is yeah, sure, it could go
down a little bit lower. But that's why
I don't buy full positions. I start
small. If it flushes down to this gap
fill, I add and dollar cost average
until I get that bounce. All right. So
that's really a rundown of today's price
action. Um Apple remains strong on the
day but is into massive resistance.
Apple's one of my favorite shorts right
now. Believe it or not, as weird as this
sounds, if you've been following me, you
know I've been very bearish on the
semiconductors. I'm now long the semis
and more bearish on Apple and short
Apple. Um the idea being again is that
Apple is the recipient of money flow
from the semiconductor exodus. But
eventually that's going to revert and
Apple is into massive resistance. Let me
show you guys this chart on Apple here
because it is an epic chart here of
resistance. Apple today eking out a
small gain. But look at this trendline.
Great trendline. And look at it I mean
Apple has gained over a trillion dollars
in market cap in just the last basically
3 weeks here. I mean that is epic and
it's basically knocking on the 5
trillion valuation while Nvidia is
trying to hold on to the 5 trillion
valuation. This is a key level next week
on Nvidia. If Nvidia level here at
around 193 192, watch out. This could
easily trade back to 165
on NVDA. All right. Gold today eked out
a small gain. So again, gold amazingly
is still holding this trendline as best
it can. Take a look at that trendline
there. We'll watch to see what happens
next week and silver after flushing and
kissing my 54 support level right here,
it got a little bit of a bounce and eked
out a tiny gain on the day. Oil
continued higher. Oil into the higher
into the weekend makes sense. Why does
oil higher into the weekend make sense?
Well, because there's always the unknown
of 2 days the stock market's closed. Are
things going to escalate even further
with Iran? So the price of oil goes up.
If nothing does escalate, I would expect
a pullback on oil Sunday night into
Monday. If it does escalate, we could go
up to my shortable level at $87 a barrel
on crude oil. And then we have natural
gas just before we get to Bitcoin here.
And again, nat gas eked out a little bit
of a gain. It's amazing how nat gas is
holding this trendline. Look at this
trendline right here, right through this
low and then look at how many days it's
hit. You got to get off the mat. It's
got to start pushing back up. It was a
good day today to push back up after
tagging the line again, but let's see if
next week it can start pushing back up
towards that 3 to 310 level. Lastly,
Bitcoin guys, Bitcoin fell below key
support early but has come back and is
now slightly green on the day trading
right around 64,000. I will say this, if
you compare the S&P, Bitcoin, Nasdaq,
gold and silver, which one of those is
the best performer over the last 2
weeks? The answer is Bitcoin. Now again,
I don't know if I'm if we should make
more out of that than just okay, it's
only a few weeks, but it is intriguing
as the semiconductors have seen money
flowing out that Bitcoin could be the
recipient of a little of that money.
I'll watch it next week as well. Now
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Rumble there. All right, guys. I am
going to get going here. I got a weekend
of travel. I'll be back at my office
come Monday. Thank you guys so much for
all your support and kind words and
comments. If I've been able to just
enlighten you on one or two things in
today's episode or in any episode this
week of the game plan, I hope I hope
that that's that's good. And it's really
what my goal is here is just to help a
little bit, just a tiny bit. All right,
go have a great weekend, guys. I'll see
you soon. Take care.