GAME PLAN REVEALED: CPI, Cycle Date Risks & Market Cracks

In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at Verified Investing, dissected the June CPI report, shrugged off further trade headlines, and spotlighted emerging cracks across major markets. With consumer inflation printing well below expectations, bond yields falling, and stocks grinding toward all-time highs into a key cycle date, discerning investors must ask: are today’s rallies real or just the calm before the storm? This article expands on Gareth’s insights, provides historical context on technical formations, and highlights the critical levels traders must watch in equities, bonds, commodities, and Bitcoin.

CPI Prints and the Inflation Outlook

Last night’s Consumer Price Index data delivered a surprise:

CPI month-over-month: +0.1% vs. +2% forecast
CPI year-over-year: +2.4% vs. +2.5% forecast (4.0% actual vs. 2.5% forecast)*
Core CPI ex-food & energy: +0.1% vs. +0.3% expected

*Note: The transcript cites “4% actual versus 2.5% forecast” for the year-over-year number; assuming a typographical error, we focus on the 2.4% y/y print.

This moderation has reignited hopes that tariff-driven price pressures remain dormant—at least for now. As Gareth warned, “Businesses bought a ton of inventory ahead of the tariffs. They’re still working through that, so we haven’t yet seen the full pass-through to consumer prices.” History shows that when companies face a durable tariff increase—around 12% on average—they eventually shift the burden to consumers. We could see that pass-through emerge over the next six months, pushing headline inflation higher.

For now, however, the soft CPI reading gives the Fed more latitude to cut rates sooner or more aggressively. That dynamic is already visible in Treasury markets.

Trade News: The Waning Impact

Just last night, headlines touted a tentative U.S.–China deal on rare earths and student visas, with Beijing agreeing to maintain its 55% tariff rate. Traditionally, any positive U.S.–China trade story sent S&P futures surging. But this time, “the futures barely budged,” Gareth noted, “and this morning’s bump on more details faded right back to flat.”

Over the past three months, equity futures have become progressively immune to trade noise. What once sparked 1% swings now registers as white noise. The decades-long U.S.–China trade saga has taught markets to ignore headlines until the underlying economic data shifts. As Gareth summarized, “Trade news is becoming less and less important because markets are becoming more immune to it.”

S&P 500 at the Precipice of a Cycle Date

Despite fading trade reactions, the S&P 500 initially opened 20–25 points higher on the CPI beat, “slowly grinding toward that all-time high,” Gareth observed. Yet a looming “major cycle date” between Thursday and next Wednesday raises the stakes. Historically, markets often top or turn near these cyclical windows—especially after double-top formations.

Gareth cautioned, “Watch very closely: does the S&P get up to that double top, maybe pierce it, and then the cycle date hits and we see the rug pulled out from under this market?” If the index pierces its highs only to reverse sharply through this cycle zone, that would echo past market inflection points in 2018, 2020, and early 2024, when cycle chronology trumped fundamentals.

Sector and Stock Spotlights

GE: Trendline Rejection Signals Energy Fatigue

General Electric’s energy spin-off, GE Vernova, had been a relentless vertical runner. But yesterday’s slide shattered its rising wedge. Reviewing the long-term chart, Gareth pointed to a trendline drawn from the 2022 low pivot through recent highs. “We just hit that line a few days ago—boom—and then the drop,” he said. This mirrors classic trend exhaustion: price rallies into resistance, triggers stops, then reverses sharply.

Royal Caribbean (RCL): Double Top and Pseudo-Rug Pull

Cruise operator RCL pierced its year-to-date high, only to reverse and undercut recent swing lows. Gareth likened this to the S&P scenario: “It pierces, stops out shorts, lures in breakout bulls, and then pulls the rug.” Such skeleton patterns are warning signs across cyclicals that led the rally since April’s lows.

Semiconductors (SMH): Critical Gap Fill Test

The VanEck Semiconductor ETF (SMH) finally filled its secondary gap yesterday—an event Gareth tagged as “a very big level for the semis.” The adage “where semis go, markets follow” has held since April’s low, but if SMH reverses here, broader equities could falter. Gap fills often act as magnets for price, then barriers—this one sits at that gap level.

GitLab (GTLB): Earnings Gap and Potential Day-Trade

Gareth noted GitLab’s post-earnings decline around $4,160, a gap that’s largely filled. “I don’t think I’ll play that because price is already in the level. But if we go down to $3,980, I’d be interested in a day trade, with a double bottom at $3,800 as additional support.” Day traders could eye that zone for a bounce or continuation pivot.

GameStop (GME): Choppy Comeback Lacks Conviction

GameStop’s attempt to “reinvent” itself via Bitcoin buy-ups led to a muted bounce. Gareth concluded there’s “no day-trade here,” as the stock has chopped in a 10% range post-earnings, lacking a clear directional cue.

Bond Yields and Fed Implications

The 10-year Treasury yield traded lower, retracing into prior resistance. As Gareth explained, “If inflation is lower, the Fed has the ability to cut rates sooner or more aggressively.” A lower yield imbibes risk appetite, fueling stocks—yet the big test arrives tomorrow when $22 billion of 30-year bonds auction. Weak demand could push yields higher, reversing today’s relief rally.

Bond auctions are a real-time barometer of global demand for U.S. debt. In September 2019 and March 2020, poor long-bond bid-to-cover ratios presaged equity drawdowns. Traders must watch those auction results as a potential early signal of shifting risk preferences.

Commodities Corner

Gold & Silver: Unusual Strength Amid Rally

Gold’s reaction to stocks grinding higher has been muted: instead of a typical drop, the metal has traded sideways since April 7th. Remarkably, gold is net positive even as the S&P is up ~25% and Nasdaq ~35% off their lows. Gareth noted, “Sideways in a rally—that’s bullish for gold,” driven by central banks (notably China) loading up on reserves.

Silver topped near $37.50, then retraced toward $34.40–$34.50. “That former pivot high is now a buy zone,” Gareth advised. The precious-metals divergence signals cautious optimism: equity bulls are hedging with safe-haven metals.

Platinum & Palladium: The Catch-Up Trade

Platinum has underperformed gold since 2022 but has exploded higher this month. “There’s a catch-up trade in play,” said Gareth, pointing out palladium’s similar move—even though palladium has stalled at resistance near $2,350. Both metals, critical in auto and industrial catalysts, remain in multi-year uptrends. A breakout could attract fresh industrial-demand flows.

Copper’s Bear Flag Threats Global Growth

Copper’s chart shows an ascending parallel and a text-book bear flag after a sharp stop. Historically, copper bear flags warn of global manufacturing slowdowns. After January’s slide, the current pattern could resolve lower, signaling caution for growth-sensitive equities.

Energy Markets: Oil and Natural Gas

Oil has been stuck in a $64–$68 range since March. This morning, Gareth “dipped a toe in the water” with a starter short above $66 at $66.21. The pattern—snap down, bear flag, snap down—suggests a larger breakdown ahead, perhaps toward $60 if the flag fails.

Natural gas remains choppy between $2.60 and $2.80, lacking a clear trend. Traders should wait for a decisive move through $2.77 to confirm a new directional bias.

Bitcoin: Pausing Before Potential Upside

Bitcoin has paused under resistance at roughly $113,000-ish. Gareth expects “one more move up into this level” before a new leg unfolds. Historically, Bitcoin has led equities in both tops and bottoms. A breakout or rejection here could foreshadow broader market sentiment shifts.

Conclusion: Watching for Cracks in the Rally

Despite better-than-expected CPI data and fading trade risks, “if the S&P closes flat or negative today, that would get my attention,” Gareth warned. Weak breadth in stocks like GE, RCL, and semiconductors suggests the rally’s underpinnings may be eroding. Coupled with a critical cycle date and major bond auctions looming, traders must remain vigilant.

Key takeaways for positioning:

• Respect the major resistance around the S&P double top and watch for a cycle-date reversal
• Monitor bond auction results for signs of waning demand in long-term Treasuries
• Use multi-factor technical levels (gap fills, trendlines, pivots) to define high-probability entries and exits
• Trade the leaders—semiconductors, energy, and industrial metals—but watch for early cracks
• Maintain disciplined sizing: even high win-rate setups can fail some of the time

Whether today’s market remains immune or finally succumbs to these warning signs, the framework provided in this edition of GAME PLAN REVEALED offers traders a clear roadmap for navigating both upside squeezes and downside reversals. Stay humble, stick to your levels, and trade the probability edge.