Bulls Take Charge, AI Stocks Jump, Gold Attempts Breakout As Eyes Focus On Yen And Yields

AI Summary

Transcript

My name is Gareth Soloway and I was a
losing trader until [music] I mastered
technical analysis. Logic and charts
beat hype and narratives every time. Now
I teach investors the same techniques
that made me a 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 as always, we're going to dive into
the charts and data to get ourselves in
the position to potentially make money
today in the market. So, first off, S&P
500 is looking to open up slightly
higher. The S&P is close to making a new
all-time high and likely will today. We
saw the breakout yesterday above that
downs sloping trend line I've been
watching. Sure enough, today we're
seeing followthrough. Now the
follow-through is coming on the back of
Palunteer earnings as well as earnings
from Caterpillar plus continued weakness
in the yields. So oil is coming down.
We're continuing to see yields pull back
that is giving the market extra juice to
push up in the near term. In addition,
technology namely again like I mentioned
Palanteer, but AI stocks are catching a
bid again. So let's get right into it.
Let's look at where the S&P futures are.
the S&P futures. You can see again
yesterday was a tremendous rally day.
S&P was up over 1.5%, NASDAQ up over
two. We closed right here, and you can
see we've been trending slightly higher
into the morning session. Now, the big
deal for me was that daily chart of the
S&P 500. So, remember, we've been
watching this longer term trend line,
which was acting as support. Now
remember it was resistance marking the
top from 2021's bull market. It was also
tagging the highest point here. You can
see no other line or no other candle
tags the line. So that's the highest
point you can get to. We then broke out
above it. Came retested, bounced,
retested, bounced, retested, and bounced
and broke out. Notice high pivot to high
pivot. There's your breakout. So, the
S&P has broken out. Likely will make a
new all-time high. How high could the
S&P run in the next few weeks? And to do
that, what we want to do is look at our
longer term trend line. So, what we're
going to do here is we're going to draw
a trend line in here and start noticing
where this takes us up to. So, if we
look at this and we kind of can even
drag this back even further, there's a
very intriguing trend line here. And in
fact, look at this. It actually goes all
the way back here to 2023.
And so essentially, we have this longer
trend line that comes up and it does
give us a potential upside target in the
near term, which as of now would be just
above 7800. Now, obviously, this is an
ascending trend line, so it's going to
creep higher over time. So, we'll have
to monitor and update. But right now,
that's kind of my base case of assuming
we break above and hold above our
all-time high here on the S&P, we could
be headed towards 7800
in the coming weeks. Now, what's the
driving force here? Well, to put it in
simple terms, it's been earnings,
generally earnings, and we've seen
Microsoft and even Meta. Meta didn't
have great earnings, but even that stock
has had a monstrous rally. Alphabet fell
on earnings, but it wasn't the earnings
that were bad. it was the capex
spending. And so the the the numbers are
fantastic in these large cap AI plays,
whether they're data centers,
hyperscalers, or chip plays. It's just a
matter that of the spending. If the
investor can get over the massive
spending thinking that eventually we'll
see results from that, then obviously
valuations can continue to go up in the
short term. All right? So we have to
monitor that. Okay. So that's where we
are. I'm going to keep an eye on this
today. Remember, the first big thing
we're watching is the double top
all-time high, which will open right
around. Do we close above that? Do we
confirm or do we close below it? That's
going to be the kicker for where this
market can go in the near term. Now, as
I mentioned, 10-year yields are coming
in a little bit on the daily chart. So,
that is obviously helping the market.
And that is directly related to the fact
that oil is down again today. So again,
there's been no new attacks, still the
hope of negotiations between the US and
Iran. And with oil coming down, that's
taking pressure off of basically
interest rates having to go up to
compensate for added inflation. Okay, so
again, we'll keep an eye on that and see
where things ultimately pan out. Now,
couple other factors here. Looking at
the US dollar today, the dollar is flat
on the day. Remember, the dollar had a
big fall here, tagging this technical
support. Bounced off of it yesterday.
Today is pausing and now we're in a
waiting motion. Which way do we go on
the US dollar as this wedge starts to
kind of compress more and more? Now, one
of the stories that in my opinion is not
getting enough news time and this is
very common for mainstream media and
even social media to kind of look over
big things and my job here is to make
sure you understand the biggest factors
and this factor is the dollar yen. Okay,
so what we heard about and let's take a
look at the dollar yen, the USD JPY
here. We saw the dollar yen collapse
over the last few days. It's catching a
small bid today. But this collapse was a
direct result of a dual intervention by
the US government and the Japanese
central bank. Right? So the US markets
and the Japanese markets, they
intervened because the yen was
collapsing too quickly. Now you might
say, well, who cares about the yen?
Well, the problem is is that every fiat
currency is basically in the same boat.
Debt is going up. Japanese debt to GDP
is 240%. The US is over 130% debt to
GDP. Right? If you look at other major
currencies, everyone's playing by the
same set of rule books or rules, which
is print your way out of every
catastrophe or issue. Now, that works,
but it weakens fiat more and more, and
eventually it won't work. But the point
here is this is that the US jointly
intervened because they know that if one
domino falls, meaning one major currency
like the dollar yen, guess what happens
to every other currency like a domino,
it falls and the next one falls and the
next one falls. And so you're going to
see this, mark my words, you are going
to see more joint interventions by
multiple countries that have major
currencies because of this issue.
They're all doing it. They're all
screwing up their currency. They're all
printing their currency. They're all
running up their debt. It's
unsustainable. And so instead of just
one country intervening, they all
realize they are going to have to act in
tandem to offset absolute catastrophe
for fiat fiat currencies or fiat. Now
while that's unsustainable as well, what
we need to realize as investors is that
on weakness, you got to buy physical
assets. And physical, I mean gold, I
mean silver, um other precious or
semi-precious metals as well as in my
opinion a small amount of Bitcoin just
in case Bitcoin does turn out to be what
many people hope it will be. All right,
so again that's my little sermon for the
day. We're going to get back to the
charts, but I did think that that was an
under reportported factor here in the
markets. Now turning our attention back,
what stocks are moving? Allen is having
a monster move here. The stock is
trading up, I think, north of 15% at
this point. Look at the run on earnings,
reporting great earnings after the bell.
This is what I'm watching today. Only as
a day trade. Please note that only as a
day trade. I'm monitoring the 150 level.
Major descending trend line right here.
That's the level I'll be eyeing to short
today as a day trade. As a swing trade,
am I buying? Heck no. I can't pay up
15%. Am I shorting? Nope. Not even
close. Because if you look at the chart,
the chart's been in a downtrend. If it
breaks 150, it becomes a breakout
scenario. And I don't have a good enough
factoring to warrant the the short on a
swing basis. Day trade is different. I
can be in and out within seconds. I can
dollar cost average maneuver, but swing
trade, I am staying on the sidelines.
Caterpillar, look at this. Caterpillar
reporting blockbuster numbers as well.
that stock is soaring in the pre-market
daily chart. What I'm looking at here is
a very key level starting to show up. If
we look at this, we can see I believe
there was a line somewhere in this
vicinity. Let me look and see where it
was. There was a a little bit of a line
here which is right above a pierce of
930. Problem is, it's already there. So,
I'm a little bit careful on that. I
think really again 930 is going to be an
interesting level, but I'm a little
cautious on whether or not I'll short
that as the stock again could easily
push through possibly getting as high as
960. But watch this 930 level that we're
currently at. That's going to be a big
test as we look. You can see again high
pivot, high pivot, then low pivot, low
pivot, and low pivot. And then we broke
here, retraced, and then got crushed.
And now we're back to that level. So
again, there is precedence here for
rejection at this level. But again,
Caterpillar, we got to monitor it. The
other thing I would do is also look at
our Fibonacci and monitor the level.
Interestingly enough, the 50% is right
here. But you see where I'm getting the
960 potential upside. That would be the
six the 618 Fibonacci retrace on the the
chart. Next up, Spotify falling on
earnings. Daily chart, I have an old
trend line down here, but daily chart,
I'd be eyeing for a day trade. This $440
level about $15 away. That would be only
as a day trade. Swing trade, uh, I don't
really have much on this. I'd need to
see it come substantially lower. Wfair.
Wfair surging dramatically higher today
on better thanex expected earnings
results on a daily basis. You had this
kind of little bullish consolidation. It
is pushing up. This one's an easy find
right up here. Double top at around 120.
There should be some significant
resistance there. A AOI big surge on
this one in the early trading session.
This along with COR, Lummentum, Sienna.
Um, these names are rallying massively
today on word that some of their optical
equipment that goes into data centers
might get banned from China. Meaning
that that we the US is looking to ban
that from importing from China, which
means that any company here in the US
that makes their stuff here could see a
jump in demand. So that's why we're
seeing big moves on these. In terms of
trading levels, my level here on AOI is
right around 149 to 150. Pivot low here
only as a day trade. CO HR coherent.
Same sort of deal here. I'm also eyeing
this level right in here around this 350
level there. And Lum big surge on that
name as well. And really, I'll be
eyeing, you know, maybe aggressively the
900 level. That would be aggressive, but
if it gets through there, you could go
up significantly more. So again, just
some big movers in the pre-market, not
only from earnings, but also from
potential bans impacting China and
therefore better for US companies. Okay,
now moving on to gold today. This is
going to be interesting. Can gold
finally break out of this wedge which is
getting tighter and tighter and tighter?
This is remarkable, folks. Absolutely
remarkable. I'll keep you guys posted on
this, but again, notice we are peaking
above it. Remember, I need more than
just a close above. I need confirmation
to really solidify the breakout. The
chart's not bad here. You have a little
bit of an up move here with inside bar
consolidation that is slightly bullish.
But we also have to monitor rates. How
do rates impact? Does rate do the does
the 10-year continue to fall? And what
is the dollar doing as well as those are
major impactors for gold. Silver today
getting a good bounce, but the chart is
still in weak position. As long as it
remains below $64 an ounce, it's in weak
position, continuing to chop in this
lower range. I do think we're due for a
rally up to test that level. The
question is, will we break that level?
And that's the bigger question there. Uh
we talked about oil already. We talked
again oil having a down move today down
another almost 3%. We know that if oil
keeps falling, support will come in
around $70 a barrel based on this
technical level. And then if we see
natural gas, Nat Gas is coming in just a
little bit here. So watch Nat Gas. I
still like the 256 257 area, which is
this longer term trend line going back
here if it flushes into that level. All
right, so there's a lot to unpack today,
guys. It has been an incredible, insane
multipleweek period between earnings and
the Fed and everything else. And don't
forget today at 10:00 a.m. Jolts data
comes out. That's job openings. That's
going to be key. And then tomorrow, ADP
private sector. I'll cover that in the
game plan. And Friday morning, the
non-farm payrolls report. All of this
influencing will the Fed be raising
rates in September at their September
meeting. I'll keep you guys posted on
what the data is telling us. Have a
great rest of your day, guys. I got to
get to my trading room. I will see you
soon and thank you for tuning in. Take
care.