GAME PLAN REVEALED: Key Market Levels Before Powell's Jackson Hole Speech

The financial markets are in a holding pattern, characterized by choppy, sideways action as traders and investors brace for the week's main event: Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Economic Symposium. In this morning's GAME PLAN, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the noise to deliver a masterclass on what truly matters—the charts and the data. By focusing on critical resistance levels in major indices, emerging patterns in currencies and yields, and high-probability setups in individual stocks, he provided a clear roadmap for navigating the market's current state of anticipation.

Today, we'll expand on these key insights, diving deeper into the technical principles, macroeconomic undercurrents, and trading psychology that underpin a disciplined, probability-based approach to the markets.

Major Indices Testing Critical Ceilings

While the day-to-day price action may seem directionless, the major indices are sitting at technically significant inflection points. The S&P 500, in particular, is testing a trend line that demands respect.

"This is the most important trend line that I am following at this point," Gareth noted, highlighting a line connecting the pivot low from October 2023 through the corrective low of August 2024. After breaking down during the "Liberation Day sell off," the market has now rallied back to test the underbelly of this broken support line. In technical analysis, when a key support level is broken, it often flips to become a new resistance level. This "retrace to the scene of the crime" is a classic pattern, and the market's inability to reclaim the trend line so far confirms its validity as a formidable barrier.

Meanwhile, the tech-heavy Nasdaq 100 finds itself in a similar, yet distinct, predicament. It has reached the top of a parallel channel that has defined its ascent since May 2025, hitting resistance around $583.35. The critical question now is whether the index will retreat to the lower band of the channel near $566 or find the strength to break out. This leads to a crucial educational concept for every trader.

The Battering Ram: Understanding Trend Line Strength

How many times can a trend line be tested before it breaks? This isn't a random occurrence; it's a game of probabilities. Gareth provided a powerful analogy to explain this core technical principle.

"The key is just like a door that you want to bust through, we ram into that door as hard as we can... if you do it again and again and again, it slowly wears the door down until that door finally breaks. Same thing works in charts."

This concept can be broken down into probabilities:

First 3 Hits: These tests often result in strong bounces as the trend line proves its validity.
Fourth Hit: The probability of a hold versus a break becomes roughly 50/50.
Fifth Hit: The probability of a break increases to 60%.
Sixth Hit: The probability of a break rises to 70%, and so on.

This principle is directly applicable to the Nasdaq 100's parallel channel. The lower support band has been successfully tested three times. The next touch would be the fourth, placing it at a critical 50/50 juncture. Understanding this dynamic allows traders to move beyond simple hope and assess risk with mathematical clarity.

Macro Clues from the Dollar and Yields

While the market awaits Powell's speech, other charts are already providing clues about potential future direction. The U.S. Dollar Index (DXY) is forming a classic bear flag pattern. After a sharp decline, the dollar has been grinding slightly higher within a tight channel. This formation typically resolves with a break to the downside, continuing the prior trend. This potential dollar weakness has significant implications for assets priced in dollars, such as commodities and international equities.

The 10-Year Treasury Yield is exhibiting a similarly bearish pattern. After breaking down from a wedge, it has been consolidating in what Gareth describes as a "bearish inside bar flagish pattern." This means that all recent price action is contained within the range of a single large down candle, signaling a pause before the next likely move lower.

Probability favors a decline in yields, with initial support at 4.12 and a more significant target at the 3.85 level from April 7th. A move to 3.85 would be profound. As Gareth explained, such a drop wouldn't likely be driven by Fed rate cuts alone. "What it would tell us is the economy, if rates are going back to 3.85, it's telling us the economy is slowing and that would bring in rates, no doubt about it."

High-Probability Setups in Individual Stocks

Amidst the broader market indecision, individual stocks are offering clear, actionable levels for disciplined traders.

Intel (INTC): A $2 billion investment from SoftBank sent shares up 4%, but Gareth cautioned against chasing the move. The high-probability setup isn't here; it's higher. A potential short trade entry exists at the gap fill resistance around $25.90, a full dollar above its current price. This exemplifies the patience required to wait for price to come to a pre-defined level of significance.
Home Depot (HD): Following its earnings report, the stock saw a modest pop. While an aggressive trader might see resistance at the $408.00 pivot high, Gareth is targeting a much stronger confluence zone between $417.00 and $418.00. This area represents a cluster of prior highs that repeatedly rejected price, making it a far more probable reversal point.
Medtronic (MDT): The stock gapped down on earnings, creating a potential day trading opportunity. A support zone between $86.00 and $86.50 was identified, combining a gap fill with a series of prior lows. This multi-factor support increases the odds of a bounce for an intraday trade.
JPMorgan (JPM): The chart of this banking giant is flashing multiple bearish signals. It's simultaneously forming a bear flag, has been rejected from the top of a parallel channel, and is carving out a potential head and shoulders pattern. A confirmed break of the neckline around $287.00 would trigger a probable downside move toward major support at $268.00.

A Tale of Two Retail Favorites: Palantir vs. Robinhood

The divergence between two of retail's most popular stocks, Palantir and Robinhood, offers a fascinating case study. Palantir, after a massive run, is starting to roll over. Using parallel trend lines, Gareth identified a powerful downside target where a bounce is probable. The level between $161.00 and $162.00 represents a confluence of the channel's support line, a prior flat top, and a gap fill. While Gareth remains cautious on the stock's long-term valuation, he acknowledges this multi-factor level is likely to attract "buy the dip" interest for a short-term trade.

In contrast, Robinhood (HOOD) has held up remarkably well. It is currently caught in a tightening wedge pattern. Key resistance lies at a long-term trend line around $118.00-$119.00, while critical support sits at the wedge's lower boundary near $110.00. A confirmed close below $110.00 would signal a breakdown and likely trigger a larger correction, potentially causing it to follow Palantir's downward path.

Crypto and Commodities: The Critical Role of Confirmation

The principle of data-driven trading extends across all asset classes, with a particular emphasis on confirmation.

Bitcoin (BTC): The world's largest cryptocurrency closed below a major upsloping trend line yesterday—a bearish development. However, a break is not the same as a breakdown. "I always say look for confirmation to be sure," Gareth stressed. "I'd rather be sure and miss a little bit of action versus not know and get whipped out of a trade and take a loss." For Bitcoin, confirmation would require another daily close below the 114,600 level. Without it, bulls still have a chance to "rescue" the price. A confirmed breakdown would open the door to 112,000 and potentially lower.
Gold (XAU/USD): Gold provides a perfect example of differentiating between near-term and long-term outlooks. In the short term, the chart is bearish. It broke its uptrend, retraced to test the underside of that trend line, and was rejected. This favors a move back down to support at $32.70. However, zooming out reveals the entire consolidation is forming a massive bull flag. This tells investors that while short-term weakness may persist, the long-term probabilistic outlook remains overwhelmingly bullish, driven by global debt and money printing.

Conclusion: Trading with a Probabilistic Edge

As the market holds its breath for guidance from Jackson Hole, the charts are already speaking volumes. The key takeaway from today's GAME PLAN is the power of a disciplined, unemotional, and probability-based methodology. By identifying key levels, understanding the mechanics of trend lines, and demanding confirmation, traders can stack the odds in their favor.

It's an approach that removes guesswork and gut feelings, replacing them with a logical framework. As Gareth concluded, "It's not personal preference, it's not my gut, it's not my heart, it's what are the charts saying, what's the data saying. Therefore, a probability can be assigned to a trade and I want to take basically 75% win rates or better and the rest takes care of itself." With this mindset, traders are well-equipped to navigate the volatility that Friday's speech will inevitably bring.