GAME PLAN REVEALED: Trade Fears, Yield Dynamics & Key Levels

Yesterday’s pullback in global markets highlights the growing anxiety over renewed trade-war headlines and rising interest rates. In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at Verified Investing, revisited two critical trend lines on the S&P 500 futures chart—an ascending “scene of the crime” retrace and a steeper up-sloping support line—that converged into an X‐mark last Thursday. With fresh tariffs of 25%, 30% and even 40% slated to hit August 1 if no deals materialize, the question is whether profit-taking has only just begun. This article expands on those themes, adding historical context, intermarket relationships, and deeper technical insights into key individual names, crypto, metals, and energy.

1. Renewed Trade-War Fears and Market Psychology

Since the late 2018 U.S.-China tariff skirmishes, markets have shown a habit of reprieving on holidays—most recently on Liberation Day, when a “90-day ceasefire” was proclaimed. “We’ve only gotten maybe two or three deals done, so the odds all deals close by August 1 are small,” Gareth reminded viewers. The buildup to August 1 recalls prior episodes when failure to reach agreements triggered violent sell-offs. Traders now face a classic behavioral dilemma: do they lean into the bullish trend or harvest gains before a potential escalation?
Historical precedent suggests that trade-driven pullbacks often resolve in one of three ways: a swift rebound if talks resume, an extended consolidation if navies withdraw from the brink, or a protracted downtrend if tariffs actually bite into corporate profits. Yesterday’s “final flush,” characterized by two aggressive 10-minute sell-off candles followed by a snap-back into the close, mirrors past capitulation bottoms—yet one day doesn’t confirm a reversal. “One day doesn’t make a correction; the question is whether price continues down, goes sideways, or ultimately has more upside room,” Gareth cautioned. Monitoring price action around those two trend lines will be crucial in the coming sessions.

2. Rising Yields and Stretched Valuations

Traditionally, equities and the 10-year Treasury yield have an inverse relationship: as bond yields climb, investors demand higher discount rates for stocks, exerting downward pressure on equity valuations. Lately, “they’ve risen together, which is concerning,” Gareth noted. The 10-year yield has punched through a long-term trend line and is now approaching 4.43%. After holiday optimism, most anticipated yields to decline amid a slower economy and prospective Fed rate cuts. Instead, foreign buyers have threatened to diversify away from U.S. Treasuries if higher tariffs materialize, driving yields higher.
It bears repeating that the Federal Reserve only directly controls the short end of the curve (overnight to six-month T-bills). The 10-, 20-, and 30-year rates are market-driven and can move independently. Even if the Fed cuts rates by 100 basis points, the 10-year yield could remain elevated—or climb further—if risk premia expand. For equity investors, this regime of synchronized rising yields and equities raises the risk that a sudden shift in bond‐market sentiment could trigger a broader stock correction.

3. The U.S. Dollar’s Key Resistance Test

Cross-asset flows often rotate into the U.S. dollar when risk aversion ticks up. After its recent breakdown, the DXY index retraced to about 97.70—“a key resistance test,” according to Gareth. A daily close above this level would suggest renewed dollar strength, which could exacerbate pressure on commodities and multinational earnings. Conversely, failure to hold 97.70 would indicate that risk appetite remains intact, giving a boost to non-U.S. assets and dollar-denominated raw materials.

Historical Context

In mid-2022, dollar strength reached a multi-decade high near 114, amplifying emerging-market stress and commodity declines. A similar dynamic could unfold if 97.70 becomes a firm hurdle. Traders should watch the dollar’s reaction this week as trade headlines swirl.

4. Stock-Specific Technical Setups

4.1 Wolfspeed: A Classic Short Squeeze

Wolfspeed (ticker: WOLF) epitomizes the volatility of micro-caps with low float. Once bankrupt and trading near $0.38 in pre-market, it rocketed to $3.35 on a parabolic short squeeze. “It’s into resistance, but if it keeps squeezing, next gap-fill level is $5.38,” Gareth pointed out. Gap fills act as technical magnets: the open gap between two price levels often attracts price back to that zone. However, at such extreme moves, position‐sizing discipline is paramount—any retracement could be swift and painful.

4.2 Carvana: Resistance Cluster

Carvana’s market cap now rivals legacy automaker Ford’s, yet its chart shows three successive pivot highs at roughly $3.64–$3.65. On a multi-week timeframe, it forms a double top at $3.76. “Between $3.65 and $3.76, look for a potential pullback,” said Gareth. Double-top patterns signal exhaustion of buyers after repeated rejections, often followed by a measured drop equal to the pattern’s height. Watch for a break below the interim neckline (around $3.40) as confirmation.

4.3 JPMorgan: Banking Divergence

JPMorgan is exercising profit-taking after piercing an intermediate trend-line. It’s now down on the session, trading at a valuation well above Citi, Bank of America, and Wells Fargo. Having rallied over 50% since April 7 lows, the stock shows negative momentum divergences on RSI—a classic sign of waning strength. For bank traders, a pullback toward the rising 50-day moving average (near $151) could offer a more favorable risk/reward.

4.4 Baidu and KWEB: China Breakout on Deck?

Baidu, trading at a forward P/E of 7–8 versus 30–40 for U.S. tech peers, is an inexpensive China play but carries geopolitical risk. Its chart reveals a potential inverse head-and-shoulders pattern, with pivot highs from 2021 around $355 now forming the right shoulder. The China internet ETF (KWEB) sits in a tight ascending wedge; a decisive break above $38 may trigger a sizable rally. “Always look at risk first, then reward,” Gareth reminded viewers. Place protective stops just below the pattern’s neckline to guard against failed breakouts.

5. Cryptocurrencies and Precious Metals

5.1 Bitcoin: Testing a Double-Top

Bitcoin has drifted slightly higher today, mirroring equity action. It formed a bullish consolidation after a wide-range green bar and follow-through, now testing a resistance line around $113,000–$114,000, where a double-top looms. “If it holds, bias is up… if it fails, support at $105k, then $100k,” Gareth outlined. Historically, Bitcoin often peaks before broad equity highs and finds key lows ahead of stock market troughs—making it a potential leading indicator for risk assets.

5.2 Gold & Silver: Divergent Patterns

Gold attempted to break down on trade-war jitters but recovered intraday before sliding back. A rising wedge has formed, with more touches weakening the lower trend line. A daily close below $3,315 could open the door to $3,100, a level that historically attracted strong buying in 2024’s inflation-spike episode. Long term, Gareth remains bullish on gold and Bitcoin as de facto hedges against $3.5 trillion in planned government spending.

Silver, meanwhile, closed above last Thursday’s range but failed to hold Monday’s gains. It’s now down but maintaining its trend-line support. While not yet a confirmed breakout, the relative strength suggests the metal could extend higher once conviction returns.

5.3 Palladium & Platinum: Industrial Catalysts

Palladium has broken out above trend-line resistance and is consolidating near $1,065. “If it holds around $1,065 on a retrace, I’d buy for the next leg up,” Gareth advised. Supply deficits in auto-catalysts and industrial demand underpin palladium’s bull case. Platinum, often overshadowed, offers similar industrial exposure with lower geopolitical risk.

6. Energy Markets: Bear Flags and Support Tests

6.1 Oil: Flag for a Breakdown

Crude oil is carving a bear flag: a sharp decline (flagpole) followed by sideways chop (inverted flag). As long as price remains inside the flag, the probability favors a breakdown toward $53 per barrel, with initial support at $64. Bear flags typically resolve in the direction of the prevailing move, especially when accompanied by declining volume during consolidation.

6.2 Natural Gas: Breaking or Holding?

Natural gas continues hammering a well-worn support line around $3.09. The more it tests this line without a meaningful bounce, the likelier a breakdown becomes—recall the 2021 lows triggered by persistent support failures. No trade is yet in place, but a clean break below $3.09 would justify a short bias, while a strong rebound could invalidate the bearish case.

7. The Discipline of Re-Evaluation

Perhaps the most valuable takeaway is that “every trade level you have must be re-analyzed. A level that was valid six months ago isn’t necessarily valid today. Time and cycles matter; patterns adjust.” Verified Investing’s mantra—No BS, just charts—underscores that technical analysis delivers the highest-probability outcomes, but it’s up to each trader to adapt levels, manage risk, and execute with discipline.

Conclusion: Navigating Uncertainty with High-Probability Setups

As trade tensions escalate and yields climb, market volatility is poised to remain elevated. By focusing on clearly defined trend lines, pattern breakouts or failures, and multi-factor confluences, traders can maintain an edge. Key levels to watch this week include the S&P’s two trend lines, the 10-year yield near 4.43%, the dollar at 97.70, and the numerous support and resistance bands across individual assets.

Above all, remember that trading is a probabilistic endeavor requiring constant re-evaluation of levels and disciplined execution. Whether price breaks down from a bear flag, reclaims a rising wedge, or revisits a gap-fill, those who adapt quickly and respect risk will be best positioned for whatever outcome unfolds.