Government Buys Back Debt, Markets Surge, Dollar Drops, Yields Collapse...Gold And Bitcoin SURGE

My name [music] is Gareth Soloway 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 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
and there is some huge news that just
broke about 30 minutes ago. The US
Treasury, the government, is buying back
long-dated bonds. So basically we know
interest rates have been going up on the
long end of the bond, the 30-year, the
20-year, the 10-year. Well, the US
government is now getting involved and
trying to control those interest rates
by essentially buying back that debt.
Essentially the idea here is that if
they buy it back and they know or at
least buyers know that there is a
potential buyer for this, that will
force yields down on the 30-year, the
20-year, and the 10-year and basically
mitigate the higher rates that we've
been seeing that have been concerning
the markets. The markets love this news.
The S&P futures surging to the upside.
Now whether or not you agree with it,
that's irrelevant at this point. I think
it's a tremendously bad precedent to be
setting, to be getting involved now in
buying long-dated bonds, but while
issuing a ton of short-dated, it's a
recipe for ultimate disaster, but in the
near term, if it brings down yields, the
markets love it. So let's take a look at
what we have here, folks. The S&P
futures, look at that jump there this
morning.
Basically we were trading neutral to
positive on the 10-year or I should say
on the ES futures, the S&P futures. Big
surge to the upside. We are seeing a
little bit of a fade here as we head
towards the opening bell. So we'll have
to keep an eye on this. But listen,
everything asset-related took a big leg
higher. We saw gold surging, silver
surging, Bitcoin surging, the dollar
dropping, obviously. The long end of the
of the yield curve fell as well. And
again, this is now a new thing. And I
wouldn't call it new. Listen, the
government has done this, but they
increased the size. They're becoming
more aggressive in an attempt to control
the long end of the yield curve. And
again, it's it's something that is like
we talked about this before, and I've
said this to you guys before. It's you
have a doctor that's been injecting via
liquidity from the Federal Reserve or
government spending drugs into the
patient to keep them alive. Well, now
the patient is getting into that cardiac
arrest stage, and the the doctor's
having to inject more drugs to keep the
patient alive. And so, listen, the party
can go on in the near term. There's no
doubt about it. There's other levers
like this to pull. But, is there a
catastrophic end to this later on, in
years from now? The answer is
undoubtedly. Absolutely. All right. So,
looking at the S&P futures again, we are
up here in the morning session. We'll
continue to watch and see how it goes.
If we look at the S&P 500, we had a down
day yesterday, nice little drop
yesterday, coming in about 7/10 of a
percent. Now, again, we have short-term
technical support right at this former
pivot high around 7,600.
As of today, we'll be moving back up.
But, basically, there's a few things I'm
watching. Number one, resistance remains
up here around 7830 to 35 on the S&P
500. Short-term pivot support is right
here at 7,600. The major level that
would kind of scream catastrophe for me
is down here at 7360.
In other words, if this one breaks,
that's really bad for the markets
because it essentially would be a failed
breakout. You had this breakout here
and we came up. If we get back below
this line where we've hit multiple times
in the past, that's where you start to
see, uh-oh, something is very amiss in
the near term with the markets. Now,
short term this is a pivot because as
long as this holds, then it kind of
favors upside. We break this, then I
think it starts to favor a retest of
this trend line. So, I'm calling this my
pivot line or fulcrum, if you will.
Essentially, it's the point on either
side where the ball rolls one way or the
other way. Right now, we're above it, so
it favors neutral to upside bias on the
S&P, and that's again what we're seeing
in the premarket with this latest news
from the Treasury. All right. So, let's
continue on here, folks. The dollar
today, look at this. And remember just
the last couple days, I've been warning
about the dollar. We've been talking
about how the dollar had broken key
support right here. This was last
Friday, then this was Monday, small
bounce on Tuesday. Look at what's
happening to the US dollar today. And
again,
while markets like a strong a weak
dollar because multinationals will make
more money, so earnings potentially
could go up,
for you and I that have dollars sitting
on our accounts, our dollar will now go
less far. As the dollar falls, remember,
we still import a lot of stuff. In fact,
a majority of things that you and I buy
is imported. All right? And that means
that those things, as the dollar drops,
will get slightly more expensive. And
the more the dollar drops, the more
expensive in real terms they will get
for us. So, just keep that in mind. We
can cheer a weak dollar because it helps
the stock market, but it really
ultimately is not what we want, and it's
just on that same path that I've talked
about, which is we are on a slow pace of
de-dollarization. Other countries are
doing it. They're slowly diversifying
away. Look at China. China has gone from
being a buyer of US dollars and
stockpiling them to selling dollars and
buying gold. We know they have bought
tons, literally tons and tons and tons
and tons of gold as their new kind of
reserve. All right? And again, their
hope, I believe, is that the yuan is
eventually the new dollar. In other
words, the reserve currency of the
world. We'll find out, but if they back
it with enough gold, there's always that
chance that eventually it flips from the
US dollar. Now, this is what I'm talking
about is not something that's going to
happen in the next year or two. This is
a long-term economic forecast on where
things could be headed. All right. So,
10-year yield today is down, obviously,
on the back of this news. Nice little
drop here. Now, keep in mind, we're
still kind of hovering in a parallel
near term. So, even with this
intervention today, I wouldn't really
call this a significant kind of
breakdown on the 10-year yield. Yeah,
you're down today, but look, we've been
in this kind of range for the last two
to three weeks. So, just kind of
hovering in here overall. If this
breaks, that's where we would get that
bigger move down, but right now, it is
still holding the line here on the
10-year yield. 30-year yield, which we
usually don't talk about that much, but
has to be Look at the drop on the
30-year yield today. That's a big point
drop, a a big basis point drop, and it
is bringing things in, but same thing.
Look at this. You have this trend line
right through these recent lows right
here. So, we do have some technical
support here we have to monitor. Now,
let's before we get into the and the
trading levels that I'm focusing on
today. Because of this news, I want to
flip over to commodities. Let's look at
gold and silver and Bitcoin. We'll even
touch on oil, which is coming down
today, which is also a positive for the
market. We'll look at natural gas as
well. But, let's go right into gold.
First of all, flip to the 10-minute
chart. Look at that run on gold after
that news was announced. Now, why would
this be bullish for gold? Well, number
one, yields are coming down. Number two,
the dollar's coming down. And number
three, if the US is having to ramp up
buybacks of their own bonds, which by
the way, think about this. How do they
get the money? So, the last time major
buybacks of US bonds was done was in the
early 2000s when the US was running a
surplus
versus a deficit of spending. So, back
in This is the Clinton era. We were
making The government was bringing in so
much money. We had more money than we
needed. So, of course, when you have
more money, what do you do? You buy back
the debt. You know, that makes sense.
But, look at what's going on now. It's
the exact opposite. We have massive
debt. So, we're having to then print the
debt
and the money to buy back this. And what
the government's doing is printing money
and and selling short-term maturity
bonds to buy the long-terms that have
the higher interest rate. They're trying
to buy down the interest rate here. And
again, in the short-term, is it a
positive for equities? Yeah, it is. But,
I'll tell you this, that 100-year cycle
for the next Great Depression looks dang
possible the more we start to meddle in
this stuff. Eventually, there's no more
levers to pull. And that's the big
concern. All right. Let's go into it.
So, gold ripping higher here. We were
just talking about if this was a bull
flag yesterday. We don't know yet, but
this surge is certainly very, very
powerful on gold. And if we flip over to
silver, silver's getting a bid, but not
as dramatic as gold. Again, it's not
back to the recent highs, but it is
still catching a bid to the upside. Oil
today, nice little drop. This is the
10-minute chart or the 1-minute chart,
but if we go to the daily chart, you're
down just a little bit. Any sort of drop
in oil is a small positive, but it's
still a stalemate in the Middle East
between the US and Iran with the Strait
of Hormuz. Oil still revolving in the
low 80s here. And as long as the chart
has the wedge, well then the wedge is
king, right? Unless we break above the
wedge and confirm, if we break above the
wedge and confirm, okay, then we start
talking about something of a bigger
move, but as long as we kind of hold
around 86 or below, then this is just
the range we are in. No big deal there.
Let's look at natural gas real quick
here, guys. If we jump over to the nat
gas chart, nat gas potentially breaking
out. Very nice move today, guys. This is
a great move on natural gas. Needs to
hold. Got to hold above 283. If it holds
above 283, then I think the fundamental
narratives begin to trigger this
breakout on a technical basis. What are
the fundamental narratives? Europe is at
a massive deficit as we get closer to
winter of natural gas.
All right. Data centers, there's so much
blowback about using the utilities that
they're now looking at getting at buying
natural gas to fuel their own data
centers. All right. And then you
obviously have seasonality. So those are
the fundamental side, which usually
don't matter too much. It's always good
to know about them as the charts will
tell the tale, and that what might be
what the chart is starting to to denote
here is that you're getting ready for a
bigger move on natural gas to the
upside. So keep an eye on this, but nat
gas is up 2% today. Flipping over,
Bitcoin trading near 65,000. That was
the high yesterday. We surged up to
65,000. Remember, guys, the level you're
watching on Bitcoin today is right here.
This is the line here, 65,400.
If we break through that, you get
another leg up to about the 67,000
level right here, high pivot to high
pivot. If that gets taken out, we're
going well into the 70 plus thousand
range. So, again, watch Bitcoin today.
Can Bitcoin break above 65,400?
Can it hold above there? I've been
bullish on Bitcoin ever since this
breakout right here, even through it
charging its batteries, kind of
relaxing, retracing to the scene of the
crime. Now, let's see if we get that
bigger move that I've been saying could
be on the horizon. And by the way, the
Treasury news, and I said this
yesterday, if there is ever a reason for
Bitcoin to do well, what we're seeing
happen and this news today just
amplifies it, that is exactly what
Bitcoin was created to do, to offset
fiat printing and shady activities and
all this other stuff that's going on.
Let's see what Bitcoin does. Can it
prove itself, at least in the near term?
We're going to watch and find out. All
right, let's go to stocks making moves,
and there are some. Look at Moderna
here. Moderna yesterday closed around
$63. It is basically up 100%
today, and this is wonderful news, guys.
They're in a phase three trial for a
melanoma
um cancer cure. A drug that uh or or at
least a a essentially a vaccine or drug
that essentially will help people avoid
getting skin cancer. It's wonderful
news. It's only in phase three, so it
still has to get through phase three and
then get to the FDA, but this is the
type of news that, you know, we hear all
these negative things, right? I mean,
there's a lot of negativity out there.
If this can be something, this would be
wonderful, absolutely wonderful. So
three cheers for Moderna here. Let's
hope that it does become successful and
something that all of us have access to
in the future. In terms of trading it,
how do we see it as a trade? So I have
to zoom way out. Look at this. Here it's
all the way up here.
As a trade, I might day trade it.
There's this little pivot low around 132
here. Maybe if it gets through that,
you're likely headed up to about 140. Um
I don't know if I'll trade the 132
level. 140 as a day trade quick hit
short. And again, remember day trades
I'm in and out very very quickly. So it
would just be kind of in, look for a
pullback, couple dollars, boom, I'm out.
That might be the better level around
140. And again, you want to be careful
because this isn't a big company. Before
this news, I think it was only about,
let me just check, it was only about a
12 billion-dollar company. So it's
doubling its market cap, but even at 25
billion, if this drug is proven,
it's it's even cheap here. Now, of
course, I'm not chasing it as a swing
trade, but if we got a serious pullback,
yeah, there might be an opportunity. I
would just caution that if this fails,
the stock goes right back to basically
60 bucks. So just be aware of that is
that drug stocks when most of their
market cap is dependent, as we see a
100% run on Moderna, if the drug fails,
then there's massive downside potential,
too. So you just got to be I mean, this
is not something that I would ever
consider going all in on ever in my
wildest dreams. If I did decide to
invest in this on a pullback, I would do
a tiny bit understanding that it could
drop 50% if this doesn't pan out. Now,
if it does pan out, then it probably
goes up 100%, right? So there's this
risk reward, but again, that's that's
the basics of it. You got to analyze the
risk and understand there's a lot of
risk with these drug stocks. Target
reported earnings this morning. The
stock initially fell, then it floated
back to basically the flat line. Now
it's down just a little bit. Nothing
major here. Their earnings were very,
very good, but remember, the stock had
run dramatically into earnings. Look at
this run. Look at that. And in fact, I
highlighted this a few days ago, 382
Fibonacci from all-time highs to this
recent low, and then gap fill, and so it
makes sense it's pulling back off of
that even after raising guidance. Next
up, TJX. TJX falling a little bit on
earnings. One of the things that I
spotted on this, do you guys see it?
It's an It's a head and shoulders
pattern here. Look at this head and
shoulders right here. Shoulder,
head,
and shoulder right here. And again,
what's interesting about this is that if
this stays down here, this will trigger,
and the calculated target is $127
as a target price. So, again, we got to
see where this ends today. It could all
for all we know rally back up during
market hours. But that is one to watch,
absolutely. Um other news, Marvell
inking another deal with Google. That
stock is ripping today. From basically
yesterday, it closed at Where did it
close? Around 214, trading at 243 right
now. That's a huge move up. Again, I'd
be eyeing this 252 level as a potential
short. So, 252 would be a level for a
day trade only. I'm not interested in
swing trading this. And then Baidu
yesterday got hammered on earnings. That
stock actually fell into some very good
technical support here. So, keep your
eye on this one. I actually think this
level is almost intriguing enough to be
a swing trade at these levels. Uh very
good long-term support, stock overdone.
Yes, they had negative earnings, not the
greatest of earnings, but again, China's
been struggling. We know the housing
market collapse over there really has
hurt their economy, and they haven't
come out of it. If they do come out of
it, these type of high quality names
will be the ones that will benefit the
most. Wow, so much to go over today,
guys. Um, lastly, let's quickly just
check in on the ES futures one more time
here. ES futures here are trading, uh,
basically just off of their highs, but
it does look like today will at least
start out as a positive day.
Action-packed day on tap. I'm going to
head into my trading room and day trade
this market while looking for swings for
the swing trading services here.
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