Yields Ripping, Markets Panic But Bull Technical Signals Say Upside, Gold, Bitcoin

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Good morning everybody. Welcome to my
trading game plan. My name is Gareth
Soloway, chief market strategist here at
verifiedinvesting.com.
So yields overnight surging dramatically
higher. Futures are down today. Although
I will say the 10-year yield is
beginning to back off from its epic push
up. So in other words, yesterday we saw
a massive move about 16 basis points on
the 10-year. So think about that and put
it in perspective. The Fed hiked about a
week and a half ago um 25 basis points.
Just yesterday the 10-year yield went up
another 16 basis points. So rates broke
out above that 5.02%.
Are we going to confirm the breakout
today or will we see rates come back in
and get back below 5%? Markets are
starting to get nervous, but I will say
this. Even when you take into account
oil where it's been trading near $100 a
barrel, rates now above 5%. 19-year
highs since 2007 was the last time the
10-year was up here. The stock market
still only down about 2% off all-time
highs. And we're still above our neutral
line, which as long as we stay above
that neutral line on the S&P based on
technical analysis, the charts say stay
long. And that's what I'm generally
doing. All right, let's jump into the
charts and take a look. We'll start with
the S&P futures here.
S&P futures, you can see again generally
trending down overnight as we've seen
the 10-year rally. And then look at
this, we got a little bottoming tail on
the 10-year chart um at 5:40 a.m. So,
5:40 a.m. Eastern time, very early this
morning. That coincides perfectly when
yields topped this morning. Yields have
started to pull back. And what are we
seeing? We're seeing the S&P futures
slowly rally off the lows on the chart.
Speaking of the 10-year yield, here it
is right here, guys. Look at this. The
10-year yield is now negative today,
back below 5.1%.
But if we go to the 10-minute chart,
look at this. When did we top out? Look
at that. Here it is.
This is 5:40 a.m. Eastern time. Going
back to the ES futures, this was your
5:40 a.m. Eastern time candle. So,
notice the inverse relationship. When
yields fell down or have fallen down,
we've seen the S&P futures inch back up.
It's really very, very simple. You know,
just to break it down. And yes, you
could say, "Hey, there's a lot of
craziness in the Middle East still.
Saudi Arabia, Houthis, Iran, US."
Um yes,
but it all for the markets. The markets
strip out all the nonsense, all the
extra stuff. They look at one or two
things.
What is the 10-year yield doing? Because
that's the cost of borrowing money.
That's the cost of funding the US
deficit. That, my friends, is whether or
not the Fed has to raise rates, which
inevitably will slow the economy. And if
we see a slowing economy, what happens
to earnings?
Earnings will go down.
The earnings growth that's been driving
this bull market will stall. So, rates
boil down to essentially everything in
the markets. I know it's crazy to think
that way, but that is the way it is. All
right, let's flip back over here. Let's
go to the S&P daily chart. This is what
I'm talking about when I say we remain
on the bullish side. You could see right
here.
Yesterday was a pretty nasty down day,
down 3/4 of 1%. But,
I mean, look at this.
Here was your previous all-time high.
And by the way, at that point, where was
the 10-year? So, if we go to the daily
chart of the 10-year,
back on and I'm just doing this now for
the first time. Let's see. On August
13th, where was the 10-year? August
13th,
right over here. Do do do do do do do
there.
So, the on August 13th,
the 10-year yield was 4.67%.
We are now at 5.1%
on the 10-year yield and the stock
market is down a whopping
1.5%.
Isn't that wild?
So, what I'm trying to do here is I'm
trying to put this in perspective.
In other words,
even though rates are up 50 basis points
on the 10-year, basically,
the S&P net is down 1.5%.
That's not much. And what that tells me
is in the short-term,
if rates pull back just a little bit,
let's just say it pull back to 5%. So,
another 10 basis points drop from where
we are now,
I think the market hits a new all-time
high. And remember, the Nasdaq just a
couple days ago hit a new all-time high.
Just something to think about. Now,
listen.
I want to be very aware that while I am
remaining bullish in the near-term, it
doesn't mean I don't have some shorts.
There are certain charts like AMD the
other day hit a major trend line. I
shorted it. We're in the money on that
trade, Smart Money Stocks and ETFs. Um
in addition, it doesn't change my
long-term catastrophic outlook
that at some point, probably around the
100-year cycle coming up, there will be
a decline that makes the Great Recession
look like a minor dip.
And I know that sounds scary and it does
but it doesn't like even though that's
scary it doesn't it doesn't mean I run
for the hills from stocks right now
cuz short-term markets are bullish.
But it does make me aware that I need to
prep and prepare for that period. All
right, so again
S&P 500 will be opening slightly lower
today. We we were down more but again as
we saw the S&P's coming back the dollar
can continues to rip up. We're now
looking at a potential hit of this trend
line at 101.63. What a rally on the
dollar here folks. Dollar does not
usually move this quickly in such a
short time but we are getting towards a
resistance zone on the dollar and if
yields pull back enough with the dollar
pulling back and here's yields again and
we can see again we're basically flat on
the 10-year yield then you have a recipe
for gold and the stock market to get
that next leg up. Speaking of gold we
can jump right into that. Gold hit my
key support trend line that I've talked
about with you guys saying that as long
as we hold this we're in a sideways
maybe slight up angle choppy zone. Let's
look at that chart right now. Here we
have it. So again look at what I'm doing
taking low pivot low pivot gives us the
high pivot. Then you connect these lows.
We hit it right here and look at today
we pierced but we're back above that
level. So right now nothing has changed
from my outlook on gold which is this
type of action and again I do I'm doing
bigger whips but we don't really know
how it's going to trade in here but the
point is you have lots of resistance
here you have technical support here. As
long as these two levels hold this caps
are up and down on gold in the near
term. Now we do have to watch because we
know trend lines can break. If we were
to break here I would start getting
concerned gold could honestly go back to
4,000 or so maybe even lower. But right
now it's holding. I give the benefit of
the doubt to the bulls as long as we're
on support and we haven't broken it.
Therefore, again, you expect a technical
bounce. Silver, same thing. Silver a
little bit weaker than gold today, but
look at the beautiful trend line here
and here that are parallel.
And look at where silver is. It's right
on that line there. So, silver still
holding its technical support. Should
that technical support break, there'll
be a little technical level here around
59 to 60, then we're looking at 55 if we
see a break below that. Now, we have to
talk about oil, right? I mean, oil
obviously has been the biggest story
aside from yields
um that we've been dealing with as the
Iran-US conflict continues, although
there have been overtures in the last
week or so to some sort of
de-escalation. I don't know if I'd call
it a deal, but de-escalation. And this
is really, like I told you before,
the president has basically 5 weeks
before the midterms. He's got to try to
get oil down. And it so far it's
working. These overtures, you know, even
if no deal is struck, if he can get oil
back down, that'll help. It's not down
enough yet, but we should keep our eyes
on it. So, let's go to oil and see what
we have on the charts. It's bouncing
again today, but notice it did hit
technical support. So, remember, this
was that great trend line which gave me
that short here. We pulled back. Here we
tagged support. Notice what's happening
right there, and we're getting a little
bit of a bounce. Generally, I'm
expecting
at this point for oil to kind of remain
like this as well. If it breaks this
orange line, that's where you get your
next drop to about 87. I could see
before the midterms we get down to,
honestly, maybe as low as 80. I have a
hard time believing we'll get below 80,
but I do think there's a chance we could
get down to about $80 a barrel. Now,
keep in mind, earlier this year before
the Iranian conflict, we were in the
60s. So, it's still 30 plus percent.
Even at 80, it's still 30% higher, but
at least it seems like some relief. Now,
we got to get diesel prices down as
well. Diesel obviously is a massive one.
Most of us don't use diesel on a daily
basis, but we do have heating oil in our
homes as winter approaches. That is a
major issue. And remember,
diesel is the backbone of the
transportation
sector. So, when you're transporting,
and I use, you know, lettuce or, you
know, you know, I don't know, TVs and
boxes, all of these UPS trucks, all of
these transportation 18-wheelers,
most of them are on diesel. And all of
that money they're spending in addition,
unfortunately, is going to get passed
through to you and I when we buy some of
these goods. It's just It's just the
nature of it. These companies are not
going to be like, "Oh, darn, we're
losing money now and we're going to go
out of business." They're going to say,
"No, we got to raise prices. We got to
raise prices so our margins stay
relatively good. We can keep our
employees, etc." Um and that's what
they're going to do. All right. So,
that's where we are on oil here. Natural
gas uh continues to kind of hover right
around the breakout level of $3. It was
up yesterday, pulled back to close just
a little bit up. Today it was up, kind
of coming back in. I'm watching this
like a hawk. Ideally, I don't need it to
continue up here. If it wants to stay
and go sideways, that's fine. What kind
of pattern would this be if we did
something like this? That would be a
bull flag, right? And then we look for
that resumption of the move. So, what we
don't want to see is price on natural
gas go like this and then like this
or any sort of steep decline. But
sideways or up is fine by me. I continue
to be bullish on natural gas uh heading
into the colder months this year. All
right, let's turn our attention to
Bitcoin now. Bitcoin did pull back
yesterday with gold and silver, no
surprise there. Um overall, you know,
you have to look at it and say Bitcoin
continues to kind of hold up relatively
well. Uh but overall here, let me just
kind of find here. Well, we'll go with
this chart right here. But overall
again, Bitcoin continues to be in a mode
that even on a pullback now on Bitcoin,
this becomes technical support. So
really again, you could see how price
This is how price works, right? It
breaks out,
then it has this choppy period, then if
it can break out above that, that level
now becomes technical support for the
next leg up. We have made a higher high
high
higher high over here as well. So in the
short term, the bear market to me is
over unless proven otherwise. In other
words, odds before we took out that high
was that it was a great bear market
rally. I caught it with members here at
Smart Money Crypto, but
it wasn't a new bull market. Now odds
have flipped to favoring that the bear
market has concluded. Doesn't mean we're
not going to pull back, and I think we
will have big pullbacks, but at least at
least it looks like based on the data,
the odds are favoring the bear market is
over. All right, couple stocks on my
radar today. Booking Holdings continues
to collapse, and again, these stocks are
all about the Muse news um Muse, which
is the Meta AI. They had their
conference yesterday, by the way, and
Meta is down today. We can look at that
chart in a second, where the levels are.
But that's a classic sell the news,
right? So the hype drives it up, and
then once they do it it it might be
great that the conference, but then
people are like, "Okay, we heard it.
We'll take profits now." Right? I mean,
it wasn't anything beyond what we people
were expecting. But what it's doing is
it's been crushing these travel stocks,
the banks, anything out there that is in
the sector where they collect fees or
have margins that can be essentially cut
down by AI, that's happening. So,
Booking Holdings, I'm watching if we
were to flush into double bottom here at
150, there should be a major technical
bounce there. That's more of a swing
trade, but it may be even tradeable as a
day trade. Um here we also have let's go
on to let's go on to Bank of America.
This is one on my radar. Major technical
support around just below 55. Any sort
of flush there, that has an ascending
beautiful trend line with this little
pivot point here. So, there are if we
can get a little bit more selling, there
are some really good long opportunities
in some of these beaten up short-term
names. Now, one name that really doesn't
have so much to do with uh the AI story,
at least not yet, is McDonald's. Now,
McDonald's got crushed. They basically
are trying to
they you know, they've seen their their
share of the fast-food market decline
and they're trying to make big changes.
With changes come a lot of costs and
it's also admitting that earnings aren't
going to be what they had hoped. But,
the stock was so oversold going into
this news that dropped it yesterday 5%.
We actually tagged a major technical
level. Look at this, guys. This is a
long and I repeat a long-term channel.
In fact, let me go to the weekly chart.
Here we are and look at what we tagged.
Look at high from 2012 and basically
marks every high pivot along the way,
the low from COVID, and we just tagged
that level. So, what did I do?
I bought a little bit.
This is when I buy. When everyone else
hates it, when it's been beaten down,
when it's at, you know, basically
52-week lows, when it tags the technical
level, but everyone is bearish on it, I
say, all right. Everyone's bearish,
meaning that the sellers have all
dumped, people are hating it, they're
under invested.
Now, I say, well, listen, any sort of
small positive and people will rush back
into this thing and I'm it's like a wave
on a surfboard. You just take takes me
right in. And that's the way I view it,
folks. Most people will read the news on
McDonald's on social media and be like,
oh, they're done, you know, I mean, you
know, you get the emotional reaction.
Like, oh, this they're over. Maybe.
Frankly, I couldn't care.
All I care about is what is it going to
do in the next month or two?
Or week or two, or day or two.
That's all I care about with the chart,
with the overallotment of bears,
reversion trade takes hold. So, that's
really where we are right now. A couple
other charts, I did mention Meta. Let's
take a look at Meta here today. Meta's
bounced a little bit off of its lows
pre-market. Nice little sell, but again,
as the stock market it is bouncing, this
is bouncing up as well, but nonetheless,
Meta into a lot of resistance with two
topping tails on the daily chart, filled
this gap right here.
Good one right there. That is on my
radar for a potential trade today. If it
were to sell significantly, where would
the support be? Where would I be a
buyer? Right here. Take a look. See
that? So, you basically have support a
pit for former pivot, former pivot,
former pivot breakout. So, where would
we expect if price starts coming in,
where would support be? Right there. See
that? Very cool. All right, guys, let's
do one more check on the 10-year yield.
Continuing to stay right around 5.1%
ES futures going into the open. Let's
take a look. ES futures are continuing
to float off of the lows, but still
slightly negative on the day. You guys
are rockstars. Thank you guys for being
big supporters of Verified Investing. I
really do appreciate everyone here does
appreciate it as well. And as always,
we're going to keep bringing you the
data and the charts with no BS. Have a
great rest of your day, guys. Take care.