GAME PLAN REVEALED: 08/22/2025

The market is holding its collective breath. All eyes are fixed on Jackson Hole, Wyoming, as Federal Reserve Chairman Jerome Powell prepares to take the podium at 10:00 AM Eastern Time. In this morning's GAME PLAN show, Gareth Soloway, Chief Market Strategist at Verified Investing, dissected the nervous energy in the markets, highlighting a peculiar pre-market reversal that raised intriguing questions.

The session began with a sharp overnight decline in S&P futures, which then executed a stunning about-face, rallying strongly into the morning. As Gareth noted, this type of action on a jobs report day might suggest an information leak. Could Powell's speech notes have made their way into institutional hands early? "It is possible," Gareth mused, "and we can all watch and see if that looks like the case... we can all look back at this and say, hmm, something went on here."

Beyond this pre-market drama, a deeper story is unfolding across the major indices—a tale of divergence, rotation, and critical technical tests that could define the market's direction for weeks to come.

A Market Divided: S&P Holds as Nasdaq Falters

While the entire market awaits Powell's commentary, the charts are already telling a story of divergence. The S&P 500, representing the broader market, is clinging tenaciously to a critical trendline that has supported it since last year. This line, connecting lows from May, June, and August, was tested and held for two consecutive days.

"It just shows you that the trend line is a powerful entity," Gareth explained. "And by the way, because of that, it tells us that if it ever does break, we probably see not just a small move down, but a much bigger move to the downside."

In stark contrast, the tech-heavy Nasdaq 100 (QQQ) has already closed below its corresponding trendline. This divergence is a significant clue, suggesting that capital may be rotating out of the mega-cap tech stocks that have led the market and into more defensive or value-oriented names within the S&P 500.

However, a break is not yet a breakdown. Gareth emphasized the importance of his proprietary confirmation signal, a tool designed to distinguish a genuine move from a deceptive "fake out." As he explained, a simple close below a key level has a success rate of about 60/40—only slightly better than a coin flip. The confirmation signal, which requires a close below the low of the breakdown candle, boosts that probability significantly.

"The confirmation signal takes the chances of a breakout or breakdown... to about a 70, 75 to 80% success that it's a real breakout or breakdown. Very important indicator, folks, no doubt about it."

Today's session will be crucial for the Nasdaq. Will it reclaim its trendline, staging a "save," or will it close below yesterday's low, confirming the breakdown and signaling further weakness in the tech sector?

The Small-Cap Coiled Spring: Why the Russell 2000 Looks Bullish

While the Nasdaq shows signs of fatigue, the small-cap Russell 2000 index (IWM) presents one of the most compelling bullish setups in the market. Since 2021, the Russell has been trapped in a massive sideways consolidation channel, dramatically underperforming the soaring S&P 500 and Nasdaq. This long period of sideways action often precedes a powerful directional move.

Two key factors support a bullish thesis here. First, the U.S. 10-Year Treasury yield is forming a classic bear flag pattern. This technical formation suggests that, despite any short-term volatility from Powell's speech, the path of least resistance for interest rates over the next few weeks is lower. Falling rates are a significant tailwind for small-cap companies and regional banks, which are heavily represented in the Russell 2000.

Second, the IWM chart is displaying a textbook technical pattern that excites professional traders: a breakout, confirmation, and retrace to the "scene of the crime." The index recently broke above a key former high at 226.65, confirmed the move, and has now pulled back to test that exact level as new support.

"For me, this is a bullish breakout with a retrace and it should resolve itself to the upside," Gareth stated. While Powell's speech remains a wild card, the technical structure of the Russell 2000 points to significant upside potential, not just back to its former highs, but potentially much further.

A Titan Under Pressure: NVIDIA's Technical Breakdown

In the world of technology, no star has shone brighter than NVIDIA. However, both fundamental and technical headwinds are gathering. This morning, the stock is trading lower after China reportedly encouraged its domestic companies to avoid purchasing NVIDIA's H20 chips. The reasoning is two-fold: the chips are seen as inferior to NVIDIA's top-tier offerings, and China shares the same security concerns about foreign technology that the U.S. does. This development directly impacts NVIDIA's revenue potential from a massive market.

The technical picture is even more concerning. NVIDIA has decisively broken below a major long-term trendline that had been tested multiple times. As Gareth has taught repeatedly, the more a trendline is tested, the more significant its eventual break becomes.

"Anytime you have a long-term trend line like this that's hammered on it so often, when you break it, it's usually not just a small move and then we just resume our uptrend," he warned. "In general, once you break, the chart is on a basically a time clock for a bigger corrective move."

Gareth's analysis points to a potential downside target near $153 USD. This isn't a random number; it represents the previous all-time high before the stock's latest parabolic run-up. This is another classic "scene of the crime" level, where a major breakout occurred. A retest of this area would be a logical, albeit significant, correction for the stock, especially with earnings on the horizon next week.

The Art of the Entry: Patience, Probabilities, and FOMO

Earnings season provides a constant stream of volatile trading opportunities, but Gareth's analysis of recent reports from Zoom, IQ, and Intuit offers a masterclass in trading discipline. The key lesson: never chase a stock higher on good news.

Zoom (ZM), for example, is trading up around $76 USD from yesterday's close of $73 USD after a positive report. While many traders might feel the Fear Of Missing Out (FOMO) and jump in, Gareth sees this differently.

"I don't buy when you get gap ups like this," he stated firmly. "The kicker here is, folks, is if once it breaks out, you look for... the retrace to the scene of the crime." The proper buy point on Zoom, according to this disciplined approach, would be if the stock pulls back to fill the price gap and retest the breakout level.

This isn't just theory. The recent trade on IQ, a Chinese internet stock, perfectly illustrates the strategy's power. Gareth highlighted the stock after it broke out and retraced, providing a low-risk entry. The result was a powerful move from $1.80 USD to a high of $2.50 USD.

Gareth's simple analogy cuts through the psychological noise: "When we go to the supermarket, I'm not rushing to pay, you know, when eggs were like $7 a dozen... I don't like paying up. When someone raises the price on something, I'm not going to buy it, but if it retraces and it was good earnings, I'm buying the retrace into technical support."

This patient, probability-based approach is what separates consistent traders from the emotional herd driven by social media hype.

China's Internet Sector: A Breakout on the Horizon?

While NVIDIA faces headwinds from China, the country's domestic internet sector is showing signs of life. The KWEB ETF, which tracks Chinese internet stocks, is one of Gareth's favorite charts right now. The price is coiling tightly at the apex of multiple converging trendlines, and pre-market action suggests it is on the verge of a breakout.

"I think you're going to get a breakout here on the KWEB," Gareth projected. "My guess is again, this has 10, 20% upside within a few weeks written on it."

Similarly, Baidu (BIDU), the "Google of China," is pressing against a similar long-term down-sloping trendline. While it hasn't broken out yet, it offers another high-potential setup to monitor. These charts suggest that a significant rotation could be underway in global markets.

Answering the Community: Platinum, Coinbase, and Inflation

Engaging with his audience, Gareth addressed several viewer questions, offering deeper insights into key assets and economic concepts.

• Platinum: The chart currently shows a bear flag pattern, suggesting more short-term downside is likely after a massive run-up. However, Gareth remains a long-term bull. "Any metal and Bitcoin, I'm long term because I don't believe that any government in the near term is going to fiscally be responsible." He identified $1,125 as a key level where he would begin to "load the boat."
• Coinbase (COIN): The crypto exchange is at a critical juncture, testing major support at the $299-$300 USD level. A hold here is vital for bulls. A confirmed break below this level would open the door to the next support zone around $265-$270 USD, a move that would likely be driven by further weakness in Bitcoin.
• Supply-Side Inflation: A viewer asked why hot Producer Price Index (PPI) data matters. Gareth explained that PPI reflects wholesale costs. While companies like Walmart and Home Depot may initially absorb these costs (e.g., from tariffs), they eventually pass them on to consumers. "If they feel that they can pass along the cost of tariffs, they are going to do so." This means hot PPI data is a leading indicator for future Consumer Price Index (CPI) inflation, which forces the Fed to remain vigilant and potentially keep rates higher for longer.

Conclusion: Navigating the Powell Pivot Point

As the clock ticks down to Jerome Powell's speech, the market sits at a fascinating crossroads. We see divergence between the broad market and tech, a powerful bullish setup in overlooked small caps, weakness in a market leader, and potential breakouts in international markets.

The volatility today will be immense, but the principles of disciplined trading remain constant. By identifying key levels, waiting for high-probability setups, understanding the underlying economic forces, and refusing to chase FOMO-driven rallies, traders can navigate the day's events with a clear head. Whether Powell delivers a dovish surprise or a hawkish shock, the charts have already provided a roadmap of the key battlegrounds to watch.