Yields Slammed Down Off Resistance As Oil Drops, Market Rally On Tap, Gold Likely To Bounce

My name is Gareth Soloway, and I was a
losing trader until I mastered [music]
technical analysis. Logic and charts
beat hype and narratives every time.
Now, I teach investors the same
techniques that made [music] me a
multimillionaire. 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.
Now, today we got ADP private sector
data that came in around 37,000 jobs
added in the last month. This is the
private number, so again, it doesn't
reflect the nonfarm payrolls number that
we will get on Friday. But, it does give
us a little bit of a view, which
basically tells us this number was in
line, maybe fractionally weaker, and
obviously guides us to expect the same
for the nonfarm payrolls on Friday.
Remember, the jobs number is probably
the last major point of contention ahead
of the Federal Reserve meeting on
September 16th, which will decide
whether to raise rates or keep them the
same. Right now, markets are favoring a
slight probability the Federal Reserve
will raise rates on September 16th. Now,
the big story, right? What is driving
the markets? It's oil and or yields. So,
oil and interest rates. Yields is
another term for that. But, the point is
is that the 10-year yield pierced in the
overnight the 4.8% resistance that was
the high pivot from 2025 and early in
the year. And so far, we've seen a
pullback, which has kept the markets
from declining substantially. We were
down early. As soon as the yield started
to pull back, the markets caught a bid.
Oil pulled back at the exact same time,
dropping to about $88 a barrel from
testing 92.40 overnight. Let's jump into
the charts. We'll go through all of
this, including my top trade setups for
the trading day. So, this is the S&P
futures. And what we can see here is
that this was yesterday, right? So, we
had a little bit of a pop early
yesterday, and then the markets declined
as the 10-year yield pushed up to that
4.8%
level. Now, in the overnight, we started
to trickle down as oil started to go
higher and the 10-year yield pushed
above 4.8%.
That was this. Then all of a sudden,
this morning, folks, right around 7:00
a.m., we saw the oil chart start to drop
dramatically, dropping from again,
overnight $92.40
to about $88 a barrel. And with that,
yields dropped back below the 4.8%
level. Sure enough, the futures ripped
on that, and now we've seen a little bit
of a bounce in oil and yields, so the
markets are pulling back just slightly.
It's a lot of whipsaw, but suffice it to
say, just simplifying it, which is for
me what I got to do for myself, yields
and oil up, markets down. Yields and oil
down, markets up. All right. So, that's
where we are. Let's take a look at the
10-year yield here, and you can see the
10-year yield is now fractionally lower
on the day. The big trend line to watch
here, and again, this is the one I'm
keeping an eye on, this high pivot from
January of 2025.
Drag that through right there,
and look at that. This is what in
technical analysis we would say is a
double top. Now, double tops can be
broken, so I think it's important to
recognize that, but like I like to say
in these game plans, we respect a level
until proven otherwise. In other words,
based on this, I went long a little bit
of gold with members of Smart Money
Commodities. We started to inch into a
few long positions in other key services
because if yields are into resistance
and resistance should reject price until
proven otherwise and yields drop then
the markets should catch a bid gold
should catch a bid as well and sure
enough so far we're seeing that play pan
out gold today notice in the overnight
it traded as low as 4280
it's now back to 4340
in the early session so it has caught a
bid just as we would suspect all right
so again just refreshing on the 10 year
yield 4.8% is your trigger point you can
pierce it but you don't want to see a
daily close with confirmation above it
if we do see that you're likely headed
to our 2023
high in October of that year which would
be at 5% but as long as we're here I
would generally assume until proven
otherwise we would see some sort of
pullback on the 10 year yield and that
should have a positive impact on the
stock market as well speaking of the
stock market let's go to the S&P 500 S&P
500 yesterday was down about 7/10 of a
percent but notice we are still holding
above my pivot line now what I've said a
few few guys if you're new you may not
know this as long as we stay above this
trend line I remain net bullish on the
markets if we break below this trend
line I go into a neutral stance on the
markets and then ultimately if we break
below here bearish that would be your
bearish threshold on the market so very
very simple the bullish neutral pivot
line is around 7570 that's the one I'm
watching we remain above it so even in
spite of the last few days of drawdown I
still look for further upside now you
might say well how come you know yields
are up near 4.8%
oil is is basically at $90 a barrel. Why
is Gareth bullish? Well, the answer is I
ignore the headline nonsense and I look
at the charts. And you could also argue,
and I think this is the most intriguing
aspect is that
the S&P is 3% off its all-time highs
with
yields at 4.8% and oil at 90 plus
dollars a barrel.
That's kind of bullish. Like imagine if
oil pulls back to even 85 or $80 a
barrel and yields pull back to let's say
4.7%. We could be right back to the
all-time highs. Now again, that doesn't
change my long-term
worry that the debt levels are
unsustainable and they are and that
yields will eventually go higher. They
are going to go higher eventually,
folks. It's it's unfortunately the only
way you get them down substantially is
by triggering a recession. And if you
don't trigger a recession and we keep
spending like drunken sailors in the
government, then guess what's going to
happen? Yields are going to go higher.
People that lend us money, sovereign
nations that lend us or buy our debt,
which is essentially lending us money,
they're going to demand a higher
interest rate. It's just it's just
normal. It's common sense, frankly. It's
logic. So, there's really no long-term
good outcome here. Either recession,
okay, yields come in if we get a
recession, but then obviously consumers
suffer even more or we don't and we just
continue to run the debt up and
eventually it all collapses anyways to
the downside. All right. So, that's
where we are. S&P 500 looking to open
flat to positive right now on the day.
We'll keep an eye on that. The US dollar
continues to grind up. And again, the
big thing on the US dollar is we've
already broken down. So, this is a great
bounce on the dollar, right? Great
bounce. But, the bottom line here is
we've already broken this trend line.
So, even if we get back to here, you
would still favor an eventual move lower
in the US dollar. All right, and again,
that generally you would assume would be
good for gold, maybe good for Bitcoin.
We'll have to see, but again, something
to keep an eye on. Now, overnight, the
Japanese 10-year yield continued to stay
strong here. This is the weekly chart.
We can go here. You can see possibly so
3%. This is where in trading I talk
about even numbers, psychological even
numbers. Often times we pierce them and
then a pullback ensues when it's to the
upside or if we're dropping into a major
even number, we pierce it and then get a
bounce. This is what we're looking at
here. So, today, the Japanese or in the
overnight, the Japanese 10-year yield
went as high as 3.03%
and now it's back to 3%. Now, you might
say, "Well, whoop-de-do. Who cares? It's
back to 3%. Still right at the highs."
You're right. But,
the daily candle is now forming a daily
topping tail. Topping tails are reversal
bearish signals. So, do we have an even
number pierce here that's going to set
up a pullback in the Japanese 10-year
yield? And likewise, you would assume it
would also trigger the same in the US
bond market as well with the yields
pulling back. Interesting stuff, guys.
All right, we'll continue on here. So,
we looked at gold. Gold continuing to
push up here again trading at 4340.
Notice again, I want to show you guys
this. So, where did we come into when I
gave you guys this game plan yesterday?
We have all of these support levels
right here. Overnight, we did pierce it.
Look at how gold after piercing the
level is now responding back to the
upside. In addition, take your Fibonacci
tool. So, your fib tool here, at least
on on TradingView here, is this right
here. So, take it. Go to our our lowest
point since the all-time high. So,
here's your all-time high down here.
Take that low and what we want to do is
we want to drag it up to the recent
high. Okay? What coincides perfectly
with that same zone of support and it's
the 50% fib retrace. All right, so
basically gold pulled back 50% of its
upside move from this low to this high.
We've retraced 50%. Psychologically,
that tends to be um
the key level where you can expect a
bounce, especially when it's as sharp as
we have seen this decline. So, I
continue to think gold will bounce. My
guess is back above 4400 in the coming
days. Whether or not we go to new highs
here, that's up in the air. I can't
project out that. I don't have enough
data or information on the charts. But,
in the very least, I would expect a move
back to about 4400 to 4450 on the chart
of gold. Quickly looking at silver, then
we'll get into some stock levels as
well. Silver came down overnight and
kissed this level. Notice again the
beauty of this chart. Here's your high
pivot, so you went up and you came down,
right? So, very simple. Then you kind of
kissed it right here before breaking
out. Then it became support, it went up,
tagged resistance, and then kissed
support. So, likewise, you get a little
bit of a technical bounce expected. And
again, I can't pass judgment. I know a
lot of people want me to say, "Oh,
gold's going to go to new all-time highs
in the next month or whatever." Don't
know. Frankly, I don't know. Now, if you
ask me in 3 years from now, 5 years,
yeah, absolutely. Because again, you
look at the fundamentals of debt of the
US, global debt, money supply,
confidence in fiat currencies, which
continues to collapse, it all points to
new highs on gold and silver. But,
shorter term, we have to let the
structure of the chart speak to us,
right? We can't be just assuming.
Assumptions make you go broke,
unfortunately, in the markets. Okay.
So, that's where we are on this front
here. Uh let's take a look as we go
through. Um oil, we already looked at
oil coming in just a little bit. You can
see where we talked about oil. Oil had
this breakout. It's now pulling back.
Look for a pullback on oil to this 84 to
85 trend line. We broke out, now this
becomes support. Now, I don't know if
it'll get through and and this is the
reason. I'd be very hesitant to buy oil
if it comes back here because one sort
of news piece that establishes peace or
at least, you know, again, another
deal with Iran,
oil could drop 7 to 10 dollars on us.
So, we have to be a little careful here
when this is a news-driven scenario. The
levels can work, but they do come with
Remember, every level can fail. So, even
if you have 75% cent odds of success,
any level can fail. There's 25% chance
it can fail. That's the whole idea of
probabilities. What you have to be
careful of and this is where you assess
risk versus reward in trading and
investing is you have to say, "Okay, if
this level fails, what type of loss am I
looking at?" And in the case of oil,
what's tricky is, yeah, we could buy the
84-85 level on a retrace to support, but
if it fails because of a news-driven
event, it could drop 5 to 10 dollars on
us very, very quickly before we have a
chance to react. Now, I guess we could
have a physical stop out there in the
market. I just always worry about those
getting run by the institutional money.
But, the point is analyze your risk
reward. A level can be great, but again,
you also want to know, "Well, what's my
downside?" If if no level is perfect,
which we know, even if it's high
probability, how much can I lose if it
doesn't go my way? Very important
lesson, unfortunately, one I learned the
hard way more times than I care to
remember.
All right. Um, let's go into nat gas.
Nat gas flushed yesterday and then
rebounded. I continue to really like
this chart. Right now, what we're doing
is we're seeing this area right here is
what we're dealing with now. We're
already above this pivot line, which
continues to basically, this is my pivot
line where I am bullish now, but we now
need to see it take out this zone right
here. If it can, we can get a move to
the upside. Bitcoin coming down a little
bit more. We did have a little bit of a
bear flag formation right here. We
talked about it yesterday. Looks like
it's trying to play out, but again, a
lot will be determined by risk assets
and the yields in the market, which have
been arguably one of the big drivers of
Bitcoin was when the government tried to
control the yield curve by getting
involved. Now, it's kind of still
stalled out, but we're still hanging in
there.
What you don't want to see on Bitcoin is
this low. See this low right here? Let
me zoom in a little bit. So, the low of
this date right here, bear with me,
that's August 23rd.
That was your lowest of all the
consolidation candles. If that breaks,
it probably signals a bigger decline. As
long as that holds, yeah, you got a
little bear flag here, but nothing that
I'm that concerned about overall. All
right? Now, let's get into some stock
movement. What the heck is going on? Cuz
we got a bunch of earnings yesterday
after the bell. Today after the bell,
we'll get Broadcom, which is a
multi-trillion-dollar
semiconductor as well. So, that's It's
not as big as Nvidia, but it will be
substantial. And from what Jake's
telling me in the options market,
markets or or big money's positioning
for a move up on earnings. We'll have to
see if that comes to fruition. But
again, one of the things we're looking
at here, Dell reporting earnings
yesterday after the bell, amazing
earnings up in guidance even beyond
expectations. And And ultimately again,
a substantial move here um in the
premarket. Now, I don't have a day trade
level on this, but what I've noticed is
that every time we tag this ascending
trend line, we get a substantial
pullback in Dell. Right here, right
there, and right there. So, what I'm
going to look for is on a swing trade
basis, if we get to about the 515 to 520
level, I will be eyeing this as a swing
short. As a day trade,
I don't really have a good enough level.
It's a strong stock today in a neutral
market. I'm going to leave it be at
least for the time being. MongoDB,
yikes, what a drop on this stock.
Massive decline here, falling I think
about 14% from its close yesterday.
Initially it jumped up on earnings, but
then the guidance was a little bit weak.
Now, there are day tradeable
opportunities here. So, one of the ones
I'm looking at here, there's a gap fill
at 370, right there. That looks to be
intriguing because it also extends out
here. So, you can see right in here. So,
this gap fill where we closed this day
and opened the next day up here, that
might be a day tradeable level. I'll be
looking at a 370
pierce to the downside for possibly a
day trade. In terms of a swing trade, no
level for me yet. Maybe if it falls
straight over the next couple weeks into
this ascending trend line, I might be
interested just a little bit. But, we'll
keep an eye on that. CRDO,
another nasty one on earnings falling
pretty sharply here as well. Although,
it has caught a little bit of a bid off
the lows. This is a very intriguing day
trade {slash} quick swing trade. And
now, again, I don't usually decipher
between swing trades that are average
length, which could be weeks to a month
or so, versus day swing trades that are
just a few days. This would be more of a
few days swing trade to me if anything,
if not a day trade. And the reason I say
that again is because I still think this
is going to go lower, but it's too good
of a level to pass up. Gap fill right
here and pivot low. Gap fill right here.
And this also smack in the middle. Look
at this, if we take our fib starting
point and we go up to our high right up
here, we just extend it out, the fib 618
is right in the midst of that. So,
between 176 and 168, that to me looks
like a very multi-factor firm level of
technical support. Palo Alto Networks
down a little bit on earnings, not much
though, folks. So, not really anything
that I'm getting my attention on here.
Again, if it were to flush and there
might be a little bit of an opportunity
down here around 333, still $22 lower
than current levels, but nothing that
I'm really focusing on. The The bigger
issue here with Palo Alto, folks, is
that it has a head and shoulders
pattern. Now, if that triggers, that's
problematic. Head and shoulders are
very, very bearish pattern formations.
And this is what I would be looking at.
So, shoulder, head, and then with the
gap down today, are we completing the
right shoulder? And if that's the case,
then I do want to make sure I monitor
this neckline to see if it breaks around
333 to 335. A daily close below that
could signal further selling in the
stock. All right, so that's a rundown
there of what's moving this morning.
Broadcom after the bell. The jobs report
is Friday. Lots going on. Let's see if
we can get some good action and trading
setups here at verifiedinvesting.com.
Thank you guys, as always, for the
amazing support, the kind words, and
again, data-driven, it's not perfect, as
we know, but at least we can put odds in
our favor, essentially being the casino
versus the gambler. And that's where I
want to be. I'm I know I'm not going to
win always, but can I win most of the
time consistently? That's the game that
we need to play here in the markets. You
guys have a great day, great trading
day. Let's go make some money. Have a
good one. Take care.
>> [music]