GAME PLAN REVEALED: Tariff Reversal, S&P Resistance & Key Setups

Over the three-day Memorial Day weekend, headlines rarely sleep—and neither do traders. On Friday, President Trump threatened a 50% tariff on EU goods by June 1st, sending markets tumbling. By Sunday night, he backed off to the original July 9th deadline, reviving the so-called “Trump put.” As a result, S&P futures, which traded on a shortened holiday schedule, exploded more than 1% higher into Tuesday’s open. In this article, we unpack the key technical levels and market dynamics highlighted by Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, and provide historical context, psychological insights, and actionable setups across stocks, bonds, currencies, and commodities.

1. Weekend Tariff Reversal Sparks Market Rally

On Friday, equity markets sold off sharply after Trump’s 50% EU tariff threat; by Sunday, that deadline extended back to July 9th. Futures participants cheered:

“The markets were down on Friday and then the futures took off on Sunday night into Monday and have continued generally to stay pretty strong going into today.”

This rapid policy pivot exemplifies the “Trump put”—the idea that tariff threats will be reversed if markets crumble. Historically, similar headlines in 2018 and 2019 led to brief panics followed by powerful snapbacks. With a busy economic calendar ahead (JOLTS, PCE, nonfarm payrolls), traders should ask: Have markets become desensitized to tariff headlines? Or will actual economic data finally break the pattern?

2. S&P 500 Confronts Key Resistance at 6,000

S&P futures rallied more than 1% but then faded by roughly 20 points from session highs. On the daily chart, price now approaches the pivotal 6,000 level—a former pivot zone and psychological barrier.

“If we break above 6,000, I would say we at least go to a double top and probably at least pierce the all-time highs.”

Technical Expansion
• A daily bull flag consists of a sharp flagpole rally (the April–May advance) followed by a near-right-angle consolidation. Though Tuesday’s pullback lacked a perfect flag shape, it remains within the bigger upmove. A decisive break above 6,000 targets the prior all-time highs, forming a double top.
• Failure to clear 6,000 risks a bearish breakdown, potentially retracing to 5,700 or lower support.

Historical Context

In mid-2021, a similar zone near 4,200 acted as both magnet and ceiling before the resumed rally. Retests of round numbers often precede market inflections.

3. Bond Yields: Short-Term Pullback or Another Leg Higher?

The 10-year Treasury yield has pulled back for three straight days from its monster move above 4.5%. A retest of the “scene of the crime” at 4.25% is possible, yet the ultimate target remains 4.74% before a sustained correction.

Two drivers for higher yields:

Stronger U.S. growth, which rekindles inflation fears and Fed tapering speculation.
Reduced foreign demand, evidenced by last week’s weak 20-year bond auction, signaling a lack of trust in U.S. debt.

Traders should watch whether yields hold above 4.25% and then resume their ascent, as that would confirm the uptrend toward 4.74%.

4. Dollar Dynamics: Bear Flag in the DXY?

The U.S. Dollar Index (DXY) has trended lower for two weeks, carving a chopping range that resembles a bear flag:

“As long as we remain below this trend line, the bias is bearish. If we confirm above it, throw out that bearish bias and bring it up into a more bullish or neutral bias.”

Technical Expansion

A flagpole from early May’s peak leads into a rectangle consolidation near 104–105. A breakdown projects sub-100 levels, while an unexpected breakout above 106 would invalidate the bear case.
Traders must guard against preconceived notions; the chart should dictate bias, not wishful thinking.

Psychological Insight

Admitting a chart has changed is critical. As Gareth admits, “It’s hard for me to say, okay, well, the chart has now changed.” Cultivating that flexibility reduces large losses and enhances long-term consistency.

5. Sector and Stock Highlights: NVIDIA to Natural Gas

5.1 NVIDIA (Earnings Tomorrow)

NVIDIA reports after the bell on Wednesday. Its recent bull flag looks bullish but mirrors the S&P’s consolidation, reducing its statistical edge:

“If the chart pattern matches the S&P, it doesn’t carry as much weight as if the S&P is doing something arbitrary.”

Higher-Probability Patterns

Ideal setups display relative strength or weakness—e.g., a stock consolidating while the market retreats.
NVIDIA’s pattern still favors upside toward 55.45, but the lack of divergence from the broader market limits its edge.

5.2 Pinduoduo (PDD): Tariff Victim

PDD tumbled nearly 20% on mixed earnings and threat of e-commerce tariffs:

Watch the 90 level and double bottom at 88 for a potential day-trade long if PDD flushes during regular hours.

5.3 Palantir (PLTR): Retail Hype vs. Technical Ceiling

Palantir remains buoyed by retail fans despite analysts downgrading the price target to roughly $40. Price hits a long-term trend line from 2021, converging near 135:

A break below 135 would open a shortable setup; otherwise, the buzz may keep it elevated.

5.4 URA (Uranium ETF): Blow-Off Top

Bullish long term, but URA’s Friday rally looks extended:

Daily RSI at 86 signals overbought conditions. A swift 10–15% pullback over the next week is probable.
Short-term traders can look for a reversal near 33.50–34.00.

5.5 Bitcoin: Multi-Year Trendline Test

BTC is rallying but still below the key 113–114 level—drawn from the 2017 and 2021 highs:

That diagonal has capped rallies historically. Until proven otherwise, a pullback from this trendline remains likely.

5.6 Gold, Silver, Oil & Natural Gas

Gold retreated from Friday’s pivot high; 3,100 remains critical support within a bullish consolidation.
Silver under slight pressure but holds its downsloping trend line—still bullish.
Oil chops sideways in a larger bearish pattern; short squeezes can occur, but the downtrend remains intact.
Natural Gas drifts between support and resistance, awaiting a directional trigger.

Conclusion: Weighing the “Trump Put” and Economic Catalysts

The swift tariff rollback exemplifies the enduring “Trump put,” which has underpinned market resilience. Yet forthcoming U.S. economic data—PCE inflation on Friday and June’s jobs report—will increasingly drive market direction. Breaks above key levels (S&P 6,000; DXY trend line; Bitcoin 114) will extend bull runs; failures will usher in deeper corrections. By combining multi-factor technical setups with psychological discipline—discarding preconceived biases and adapting to chart changes—traders can navigate this volatile landscape with clarity.