GAME PLAN REVEALED: 05/19/2025
In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, walked viewers through a host of pressing developments—from Moody’s downgrade of U.S. debt and renewed tariff risks to key technical patterns in equities, bonds, currencies, and commodities. Today’s article expands on those insights, providing historical context, deeper technical analysis, and actionable setups for traders and investors.
1. Moody’s Downgrade, Tariff Uncertainty, and Market Ripples
Friday night brought sobering news: Moody’s downgraded U.S. sovereign debt, lowering the credit rating and signaling “slightly higher risk to loan money” to the U.S. government. Historically, the last U.S. debt downgrade in August 2011 by S&P precipitated a spike in the 10-year Treasury yield and heightened volatility in equity markets. Likewise today, bond yields jumped as investors demanded higher compensation for perceived risk.
At the same time, Treasury Secretary Janet Yellen’s comments on forthcoming reciprocal tariffs underscored that if no deals are reached within roughly two months, tariffs could snap back to around 30% on Chinese imports—a far cry from the prior 145% peak but still a substantial headwind for global trade. Together, these developments have:
• Pushed the 10-year Treasury yield above 4.50%
• Weighed on the U.S. dollar, which is tracing a multi-month downtrend
• Triggered a gap-down of about 1% in S&P 500 futures
As Gareth reminded viewers, “charts are in charge”—we can’t force outcomes, only read price action and probabilities as events unfold.
2. S&P 500 at Critical Resistance: Bull Flag vs. Breakdown
After a strong rally off the May lows, the S&P 500 has stalled around a cluster of pivot highs in the futures. This juncture presents two distinct scenarios:
• Bull Flag Formation
A shallow pullback from resistance could evolve into a bull flag—characterized by a flagpole (the prior up-move) and a tight consolidation channel. Such a pattern typically resolves with a resumption higher, targeting fresh all-time highs.
• Reversal and Deeper Correction
A sharp break below near-term support around 5,500 would invalidate the bull flag and suggest a classical topping pattern, opening the door to a pullback toward 5,200 or lower.
“If we just go like this for the next couple days… probability would favor another move up,” Gareth noted. Conversely, a steep decline this week would tilt the odds toward an extended correction. Market participants should watch daily closes and any emerging reversal candles—engulfing bars or topping tails—for clues on which path prevails.
3. UNH Capitulation: Volume-Driven Bottoming Tail
One of last week’s most instructive setups came in UnitedHealth Group (UNH). On Thursday, UNH gapped sharply lower into support around $250—a level representing roughly a 50% decline off its recent peak. The daily candle printed a massive bottoming tail on record volume, indicating a classic capitulation flush-out:
“This is probably your capitulation flush out today,” Gareth said, pointing to the tail that saw price slump to $249 before closing near the highs.
Volume on that reversal candle was the highest in decades for a $250 billion market-cap stock—a clear signal that weak hands were exiting at panic prices while “smart money” aggressively accumulated. The result: UNH surged back to the prior day’s gap-fill near $307, a 22% rebound in just two-and-a-half trading days.
This episode underscores the power of “bottoming tails” and epic volume as reversal signals. For traders, the key takeaways are:
- Identify extreme moves into long-term support
- Confirm with abnormal volume spikes
- Wait for a close back above the tail’s high before entering
4. Treasury Yields Breakout: Bull Flags and Inverse Head & Shoulders
The 10-year Treasury yield has been a leading indicator for both bonds and equities. On Friday, yields broke out above a down-sloping trendline, completing a bull flag:
• Flagpole: The initial rally from 3.75% to 4.35%
• Flag: A sideways consolidation near 4.20%–4.30%
• Breakout: A fresh push above 4.35% to 4.52%
“You had an inverse head and shoulders, which is another bullish signal,” Gareth explained. This pattern featured:
- A left shoulder near 4.10%
- A head at 3.95%
- A right shoulder back at 4.10%
By connecting the neckline and measuring the depth, the upside target for yields comes into focus at approximately 4.74%–4.75%—a level defined by the October 2023 and January 2025 pivot highs. Traders favoring bond plays can consider:
- Shorting 10-year futures near 4.75%
- Longing TLT (20-year Treasury ETF) once yields peak, as TLT inversely tracks yields
5. Major Market Movers: Dollar, Tech, Semis, and Bitcoin
U.S. Dollar: Retrace to “Scene of the Crime”
The dollar index tagged a long-standing trendline four times since early April. Last Monday’s retrace back to that trendline—“the scene of the crime”—turned support into resistance, triggering a fresh leg down. Technically, the dollar closed below key pivots, reinforcing the probability of continued weakness in the weeks ahead.
Netflix (NFLX): Sprint to Overbought
Netflix—recently downgraded by an analyst—has sprinted 45% off its April 7 low. The current cluster of rising trendlines marks a clear shorting zone. Despite its strong brand, this $300 billion company is “way ahead of its skis,” making it a favorite play for mean-reversion traders.
Semiconductors (SMH): Profit-Taking in High Rates
The SMH ETF briefly pierced its all-time high last Wednesday but failed to hold. Elevated interest rates remain a headwind for tech and semiconductors, and Friday’s tariff headlines compounded selling pressure. Short-term support sits near the prior breakout level, but failure there could lead to a deeper washout.
Bitcoin: Bull Flag in Peril
Bitcoin carved a textbook bull flag over the past two weeks, rallying this past weekend. However, Friday’s daily candle formed a bearish engulfing-style reversal. “Every pattern can fail,” Gareth reminded viewers—emphasizing that even a 70% probability setup will falter one in three times. A daily close below the flag’s lower consolidation level would invalidate the breakout and expose 95,000–96,000 as the next support zone.
6. Commodities Watch: Gold, Silver, Oil, and Natural Gas
Gold: Immature Bear Flag?
Gold jumped after the debt downgrade and dollar weakness but now hovers beneath its bear-flag neckline. This “immature bear flag” remains inconclusive until a decisive break higher or lower. Traders should watch for a clear breakout above the neckline to resume the bull trend, or a break below the consolidation low to favor further consolidation.
Silver: Small Long Position
Gareth initiated a modest silver long on Friday, citing a base forming just above key support. Though sluggish so far, he’s prepared to dollar-cost average lower on any meaningful pullback.
Oil: Bearish Bias with an Eye on Patterns
Crude continues to chop within a broader bearish consolidation. A potential inverse head and shoulders remains unformed—since the “head” must be the lowest point—but a break above $65–$66 would invite short sellers into the market.
Natural Gas: Classic Retrace to Resistance
Natural gas perfectly illustrated the “scene of the crime” retrace: support broke, it rallied back to the former support-turned-resistance trendline, and promptly rejected. The ensuing decline underscores continued downside pressure in gas prices.
Conclusion: Charts Guide, Discipline Wins
As Gareth emphasized throughout today’s GAME PLAN, “I have no say in what the markets do. I can only read the candlesticks.” From U.S. debt downgrades to breakout failures and capitulation reversals, the chart patterns remain our most objective guide. By respecting multi-factor setups and acknowledging that “every pattern can fail,” traders can size positions prudently and aim for the 70–75% win rates that underpin long-term success.
Stay tuned for tomorrow’s session as we monitor how these patterns evolve and identify fresh high-probability opportunities.
