GAME PLAN REVEALED: Tariff Shock Sparks Sell-Off, Key Levels & Strategies

GAME PLAN REVEALED: 05/23/2025

Published At: May 23, 2025 by Verified Investing
GAME PLAN REVEALED: 05/23/2025

In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at Verified Investing, dissected a rare pre-holiday sell-off ignited by explosive tariff headlines. With the S&P 500 futures down 1.5%, the Nasdaq’s QQQ sliding nearly 2%, and Apple plunging 4%, the technical charts are flashing critical warning signs ahead of the three-day Memorial Day weekend. Today we’ll expand on Gareth’s chart-driven analysis, add historical context, and explore the psychology behind this pullback, highlighting precise levels traders and investors should watch.

1. Trade Tariffs Trigger Sharp Pre-Holiday Sell-Off

On Friday morning two seismic announcements by former President Trump rattled markets:

  • 50% tariffs on all EU goods starting June 1 due to stalled negotiations
  • 25% levies on any iPhone not assembled in the U.S., effectively targeting Apple

“Everyone else can spin their narratives... for me, I found success in trading by focusing on charts which don’t BS you,” Gareth commented, underscoring how headlines often generate knee-jerk reactions detached from underlying technical realities.

Historical Precedent: In 2018, U.S.–China tariff threats sparked a 6% pullback in the S&P 500 over two weeks. Markets then rallied sharply when negotiations resumed. Similarly, this weekend’s escalation may prove temporary—but the timing, just before a holiday, heightens downside risk as traders avoid weekend headlines.

Key takeaway: Tariff rumors can upend seasonal patterns. Pre-holiday periods usually exhibit muted volatility, but sudden trade escalations flip sentiment from complacent to cautious.

2. S&P 500 and Nasdaq 100 at Critical Inflection Points

The recent advance—nearly 24% from April lows—placed both indices into extended overbought territory. Friday’s opening print on the 10-minute S&P futures chart reveals:

  • A swift drop after the 7:40 a.m. ET headlines
  • A bounce off the major up-sloping trend line drawn from the COVID lows through 2021 pivot tops
  • A time-count peak at seven consecutive upward candles, signaling exhaustion

“The charts are the truth, right? Everyone else can pump and dump... it is what it is,” Gareth observed, highlighting the importance of pure price action.

Support & Resistance Zones:

  • S&P gap-fill and pivot area near 5,675 offers initial support on any pullback
  • QQQ zone around 500–505 (down from Wednesday’s 523 high) is the first test for Nasdaq bulls

Psychology of Extremes: At the April lows, pervasive bearishness among analysts marked a contrarian buy signal. Conversely, last week’s meme-stock mania in Robinhood (HOOD) and QBTS reflected speculative greed nearing a market crest.

3. Bond Yields and Safe-Haven Flows

Normally, a drop in the 10-year Treasury yield accompanies equity rallies. Friday’s tariff fears reversed that dynamic:

  • Yields fell modestly as traders sought interest-rate relief, yet equities sold off sharply
  • In April, we saw the opposite anomaly: panic selling in bonds, yields spiked when China halted U.S. debt purchases

Historical Context: During past trade tensions (2019 U.S.–China tariff rounds), bond yields fell as investors fled to safety, only to rebound when negotiations improved. Friday’s yield drop reflects expectations of economic slowdown and Fed rate cuts.

Red Flag: If tariffs are imposed and yields start rising, it would indicate bond investors fear inflation or credit stress—an ominous sign for stocks.

4. Flashpoints in Individual Stocks

Apple (AAPL)

Apple sank nearly 4% pre-market on the 25% tariff threat. Key levels:

  • Day-trade support: 189.70
  • First swing support: 170
  • Measured-move zone (24% drop from 225 high): ~164, aligning with prior pivots
  • Secondary pivot: ~155–156, with overshoot risk to 144

“If you’re not ready, you’re going to miss out,” Gareth warned, illustrating why mapping these zones in advance empowers disciplined entries.

Deckers Outdoor (DECK) & Restoration Hardware (RH)

  • DECK collapsed over 10% after earnings, trading just below 100. Day-trade support at 94, with swing support near 81 (full gap fill).
  • RH plunged to 130 pre-market, rebounding to 134. Day-trade level at ~127; no swing entries until a deeper retracement.

These retail names exemplify post-earnings volatility: use gap fills and pivot confluences to pinpoint high-probability zones.

Workday (WDAY)

Workday gapped lower to 248. Day-trade support: around 235 and change (prior pivot zone). If an upside move emerges, another day-trade pivot lies near 745, just above the weekly high at 715. On the daily chart, rallies have stalled at the all-time high near 715; a breakout above there would open uncharted territory, but no short setup is favored given the new highs.

5. Commodities Under Pressure

Bitcoin

Bitcoin is pulling back alongside equities, still below Gareth’s 113 and change target. Historically viewed as a risk asset ~80% of the time, BTC sometimes decouples: in early April it rose on trade fears while stocks fell. If global investors see crypto as a safe haven, a further escalation could push BTC toward that 113 and change level.

Gold & Silver

  • Gold hit resistance at the level Gareth highlighted, yet remains in a bullish consolidation (higher lows). No short—risk of a bull-flag breakout is too high.
  • Silver broke out days ago, checked back, and holds support. As long as it stays above the pivot line, further gains are likely.

Oil & Natural Gas

  • Oil: trading within a bear flag and inside-bar chop. No actionable breakout yet.
  • Natural Gas: stuck between technical support and resistance—no trade.

6. The Psychology of Pre-Holiday Volatility

Memorial Day weekends often induce calm, but looming headlines can reverse the script. Gareth noted that many dip buyers may hesitate to hold long positions into a weekend rife with unpredictable trade news.

Behavioral Observations:

  • Hot-potato trading in low-value names signals greed peaking
  • Analyst panic at market bottoms often marks contrarian lows
  • VIX spiking from 17 underscores rising fear

“Charts don’t BS you... if you learn it, you literally have your financial destiny in your hand,” Gareth emphasized, reinforcing why technical discipline and advance planning guard against emotional trading.

Conclusion: Navigating Volatility Ahead

Friday’s tariff-driven sell-off underscores the importance of adhering strictly to chart-based levels and psychological cues. Traders should:

  1. Monitor S&P support at 5,675 and QQQ near 500–505
  2. Watch bond yields for signs of credit stress if they reverse higher on imposed tariffs
  3. Trade Apple, DECK, RH, and WDAY using predefined day-trade and swing zones
  4. Respect gold’s bullish consolidation and silver’s breakout, while awaiting clearer signals in oil and gas
  5. Maintain position-sizing discipline—avoid holding risky longs into an uncertain holiday weekend

By focusing on unambiguous pivot points, gap fills, and trend lines—and remaining humble in the face of market extremes—investors can turn volatility into opportunity as we head into the three-day weekend.

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