GAME PLAN REVEALED: 05/16/2025

In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at Verified Investing, dissected a fresh batch of data and chart patterns to lay out the probabilities and trade setups heading into Friday’s session. From hotter‐than‐expected import and export prices fueling renewed inflation concerns to key resistance zones on the S&P 500 futures, and from bond yields to individual stock patterns, today’s analysis provides deeper context and historical perspective for these critical market junctures.

High-Inflation Signals from Import and Export Prices

"All right, so number one, we got import and export prices out this morning. They came in hotter than expected, quite a bit hotter."

While PPI and CPI readings earlier in the week hinted at a moderation in inflation, today's import/export figures underscore that price pressures may be resurfacing. Two factors deserve attention:

1. Tariff-Driven Costs: Yesterday’s Walmart earnings call warned that shoppers should brace for price hikes driven by tariffs—a theme first announced in late 2024.
2. Reprieve Delays: The 90-day tariff reprieve for Europe, the UK, and China appears to have merely postponed the pass-through of higher costs. Once that window closes, import prices are likely to feed into broader consumer inflation.

Historical Context
Tariff episodes in the early 2000s produced similar import price surges that ultimately found their way into headline CPI. Back then, it took several quarters for producers and retailers to exhaust pre-hedged inventories. We may be witnessing a replay: a lagged bounce in price levels that central bankers can’t ignore.

Key Takeaway
If sustained, these renewed inflation signals could complicate the Fed’s tightening trajectory. A fresh uptick in inflation may force them to hold rates higher for longer, exacerbating growth concerns when economic momentum falters.

S&P 500 Futures at Critical Resistance

Reviewing the ES futures on a 10-minute chart, Gareth highlighted a well‐defined resistance zone just beneath yesterday’s all‐time highs.

"This zone here is resistance and I will be monitoring it very closely and trading it accordingly."

Chart Anatomy

• Overnight action showed muted trading until a buy program at 3:00 a.m.
• Early data on import/export prices sparked a minor pullback—futures remain marginally positive.
• The gray shaded area marks repeated pivots: every time the index approached this band, it reversed or stalled.

Historical Precedence
Much like the post-COVID V-bottom in 2020, the current recovery has been swift and dramatic, yet the market routinely pauses at prior all-time highs. In past cycles—most notably in 2007 and early 2020—such resistance points produced multi-week consolidations before either a decisive breakout or a significant correction.

Trading Implications

• A successful breach above the zone could trigger a short squeeze and propel the S&P to new highs.
• Failure here may signal a deeper pullback, testing the prior gap‐fill levels around 5100.
• With the index short-term overbought, probability favors at least a modest retreat before the next leg higher.

10-Year Treasury Yield: Support and Long-Term Outlook

"If the economy continues to weaken and the jobs numbers start to fall apart, I have a hard time believing yields will go up… I personally think they’re lower."

Three weeks ago, Gareth identified an inverse head-and-shoulders breakout in the 10-year yield. Yields rallied through the down-sloping parallel trendline, then retraced to retest it—classically bullish behavior.

Key Levels

• Trendline support near 4.28%–4.30% represents the “scene of the crime” retest zone.
• A sustained rebound there would set up another leg toward 4.50%+.
• Conversely, a break below 4.20% could foreshadow a broader easing cycle.

Long-Term Drivers

1. Debt Refinancing: The U.S. must roll over trillions in maturing debt—higher yields would exacerbate interest expense.
2. Growth Outlook: Slowing growth and potential recessionary signals argue for eventual rate cuts, anchoring yields around a “pseudo-normal” of low 3% rather than the ultra-low 1–2% of the COVID era.

VIX and Market Complacency: A Cautionary Signal

The CBOE Volatility Index (VIX) has plunged to the 17 area—one of its fastest drawdowns on record.

"When everyone else is greedy and there’s no fear, that’s when I start to have fear on the markets."

Complacency Gauge

• A rapid decline from above 30 to below 18 leaves the VIX ripe for a rebound.
• Historically, each time the VIX dips this low, it often retraces sharply, signaling a pick-up in fear.

Trading the VIX
Gareth sometimes trades VIX exposure via VXX—the volatility ETF—mapping out swing entries around its double-bottom support near 17. While not a daily driver, recognizing this complacency warns equity traders that downside moves can be swift once fear returns.

Spotlight on Equity Setups

JP Morgan (JPM): Support-Turned-Resistance

"There's no certainty in trading. But the odds favor a drawdown…"

The weekly chart of JPM shows an eight-touch rising trendline acting as support since 2019. That line broke down in April, then flipped to resistance—classic technical flip. After testing it again yesterday, the probability leans toward a pullback:

• Resistance zone: ~$255–258
• Nearest support: prior lows near $243, then $230 if the retail financial sector weakens broadly

UnitedHealth Group (UNH): Capitulation and Bottoming Tail

A sharp selloff on news of a DOJ investigation produced the largest volume day in UNH’s history—an extreme capitulation signal.

"When you see massive drawdowns and then a bottoming tail on huge volume, that’s often the bottom."

Key Observations

• Price carved a long lower wick (bottoming tail) on the day of panic selling.
• Intraday low near $248, closing above $275, suggests smart-money bids.

Trade Thesis

• Gap fill at $308 offers the first upside target.
• A secondary run toward the $377 gap from late 2024 could unfold after a brief consolidation.

Boeing (BA): Topping Tail Signals Exhaustion

An impressive 62% rally off the 2023 lows has produced a short-term topping tail on the weekly chart.

• A small wick above $280 shows supply emerging.
• Lacking the extreme volume of UNH’s capitulation, this exhaustion signal is less potent but still bearish.

Potential Pullback Zone

• Initial support near $260–265 (prior pivots).
• A deeper retracement could test the 50% retracement of the rally around $240–245.

Other Names to Watch

• Cava (BRK.A): Post-earnings gap has retraced to flat line—no clear edge today.
• Take-Two Interactive (TTWO): Earnings short yielded gains; price has returned to breakeven—no new setup.
• American Assets Trust (AAT): A daily gap fill at $155–156 offers a potential long if triggered.

Crypto, Commodities, and Energy: Broader Market Themes

Bitcoin: Bullish Consolidation

Bitcoin has traded quietly within a rising parallel channel. As long as daily closes remain above $100,700, the path favors a retest of the double top near $109,000. A breach below that threshold would open a pullback toward $96,000.

Precious Metals: Gold and Silver Support

• Gold: After a strong bounce, gold sits atop major support near $1,880. A break below could send it toward $1,825.
• Silver: Continues to oscillate in a range that favors a bullish breakout—daily closes above $23.50 would confirm upward momentum.

Energy Markets: Oil and Natural Gas

• Oil: Choppy action for weeks is forming a long-term bearish wedge. No trade until a decisive break in either direction.
• Natural Gas: Declining off recent highs, with a gap-fill zone at $2.78 presenting a potential long if price revisits that level.

Conclusion: Staying Alert at Key Inflection Points

Today’s session highlights both opportunity and risk across asset classes. Hot import/export prices have rekindled inflation fears, putting Fed policy back in focus. The S&P 500 futures hover at a well-defined resistance zone, while bond yields and the VIX send mixed macro signals. On the equity side, technical flips and extreme volume patterns in names like JPM, UNH, and Boeing illustrate how probabilities can guide actionable setups.

As Gareth reminded viewers, "Trading is never about certainty—only probabilities." By respecting clear support and resistance levels, anchoring risk management to those lines, and remaining aware of complacency signals, traders can navigate this environment with a disciplined edge. Keep a close eye on tariff developments, labor data, and central bank rhetoric—any catalyst could tilt the balance and spark the next significant market move.

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