GAME PLAN REVEALED: S&P 500 Gap Fill, Palantir Warning & Trader Mindset

The market is holding its breath. After a week of wild swings, Monday’s session was eerily quiet, a calm before a potential storm. With major earnings from AMD and SMCI on deck after the bell, traders are laser-focused on a critical technical level that could define the market’s next major move. In this morning's GAME PLAN show, Gareth Soloway, Chief Market Strategist at Verified Investing, broke down this pivotal moment, revealing the key face-off between bulls and bears and sharing the disciplined, probability-based mindset required to navigate it.

Today, we’ll expand on Gareth’s analysis, exploring the significance of the market’s quiet coiling, the explosive implications of a key gap fill, the valuation warnings flashing in high-flying tech stocks, and the psychological framework that separates winning traders from the emotional crowd.

The Market's Moment of Truth: The Gap Fill Face-Off

Yesterday's market action was telling in its lack of action. After opening higher, the S&P 500 traded in an exceptionally tight range for the remainder of the day. As Gareth explained, this wasn't a sign of indecision, but rather a clue about who was in control.

"When you get institutions buying or selling, you get bigger swings in the market. When it's very tight like this for the entire day... what does that tell us? It tells us that we are getting essentially algorithms trading back and forth, and then the slight upside bias is generally from retail investors."

This algorithmic-driven calm has coiled the market’s spring directly at a critical technical juncture: a gap fill. A gap is created when a market closes at one price and opens significantly lower (or higher) the next day, leaving a void on the chart. These voids often act as powerful magnets for price. The market is now set to test the gap created between Thursday's close and Friday's sharp drop.

The key level to watch is $6,339 on the S&P 500. With yesterday's close at $6,329 and futures pointing to a ten-point gain at the open, the market is poised to fill this gap almost immediately. This will be the first major test, the "first face-off" for bulls and bears since last week's dramatic sell-off. The question is simple but profound: will the market be rejected at this level, confirming it as new resistance, or will it push through, signaling that the bounce has more room to run?

The Bigger Picture: Navigating Major Parallel Channels

While the gap fill represents the immediate battleground, it’s crucial to understand where this skirmish fits within the larger war. Zooming out, both the S&P 500 and the Nasdaq are trading within massive, well-defined parallel channels that have dictated the trend for months, and even years.

For the S&P 500, a powerful trendline connecting the October 2023 low to the April 7th, 2025 low forms the "line in the sand of the big play." This is the macro support that has underpinned the entire bull run. Should the market clear the gap fill at $6,339, the upper boundary of this channel would present the next major resistance target. The market’s sharp rejection from this upper trendline on previous tests underscores its significance.

The Nasdaq Composite chart tells a similar story, but with an even longer historical context. Its defining parallel channel extends all the way back to the COVID lows of March 2020. The index is currently wrestling with the upper boundary of this multi-year channel, a struggle highlighted by a "pretty nasty weekly engulfing reversal candle." This pattern suggests significant selling pressure at these elevated levels, adding a layer of caution for tech investors. These long-term channels provide the ultimate roadmap, showing traders where the most formidable support and resistance zones lie.

Valuation Warnings and Technical Setups in Focus

Earnings season is providing a masterclass in how fundamentals, technicals, and sentiment collide. This morning, Gareth highlighted several stocks where these forces are creating compelling, high-probability setups.

Palantir: A $400 Billion Question Mark

Palantir (PLTR) is surging in the pre-market after reporting its first-ever billion-dollar revenue quarter. While the growth is impressive, Gareth raised a critical red flag regarding its valuation. With the stock’s move, the company is approaching a $400 billion valuation.

"Let's just say they do four billion, $4 billion in revenue for the year. That means that this company is trading at a 100 multiple to revenue, not to earnings, to revenue. That's very lofty."

To put this in perspective, Gareth recalled the last time he saw such a metric: SE Limited in 2021, a stock that subsequently experienced a catastrophic decline. While not a direct prediction, this historical parallel serves as a stark warning about the risks of extreme valuations. For Palantir, Gareth has identified a potential shorting opportunity around the $172 to $173 level, anticipating that the initial earnings euphoria will fade, a common theme this season.

HIMS: The Anatomy of a Topping Tail

HIMS & HERS Health is trading down 12% after its report, but the warning sign appeared days ago in the form of a topping tail. Gareth used this as a teaching moment, explaining the precise criteria for this powerful bearish reversal signal.

"For a topping tail to have power, it must be at the highest point in recent history... If you zoom out on the chart, you literally would go back to February before you had a higher point... Therefore, this candle would hold weight as a topping tail."

This isn't just any long-wicked candle; its position at a multi-month high gives it predictive power, suggesting that institutions were likely unloading shares ahead of the news. For those looking at the post-earnings drop, Gareth identified key support levels to watch for a potential bounce, first around $52.25 and a more significant level near $46.80.

The Trader's Mindset: Becoming the Disciplined Robot

Why do so many investors buy at the top and sell at the bottom? The answer is emotion. The most crucial lesson from today's GAME PLAN was about stripping emotion from the decision-making process and adopting a disciplined, almost robotic, approach.

"The best investors are very robotic. They're very disciplined. They don't deviate from their stated goals of looking for technical factors... a lot of retail and even some institutions, they get very emotional during panic periods or absolute greed periods, and then they get themselves on the wrong side just before a big market reversal."

This robotic mindset isn't about being unthinking; it's about replacing emotional reactions with a logical, repeatable process. It means trusting your analysis, adhering to your plan, and executing without fear or greed clouding your judgment. This discipline is the bedrock upon which a sustainable trading career is built.

The Power of Probabilities: A Trader's True Edge

The key to this robotic discipline is understanding that trading is not about being right 100% of the time. It is a game of probabilities. Gareth beautifully illustrated this concept using the 10-year yield chart, which bounced precisely off a prior pivot point.

"It's almost like it's predestined and I think that's so amazing about the charts... you get to a point where you start to put factors together and then you can ultimately say, okay, my odds of a bounce here are, let's say 75% or 70 or 80%."

This is the secret sauce. By learning to read the charts and identify setups where multiple technical factors converge, a trader can stack the odds in their favor. The goal isn't to find a "sure thing" but to consistently take trades that have a high probability of success. With a 70-80% win rate, a trader can be wrong on one or two trades out of four and still be incredibly profitable over time, just like a casino. This probabilistic approach transforms trading from a gamble into a calculated business.

Pre-Earnings Setups and Commodity Watch

This disciplined, probability-based approach is essential when looking at volatile earnings plays and commodities.

AMD: With earnings after the bell, Gareth outlined a patient strategy. Rather than guessing, he identified multiple resistance levels for a potential post-earnings pop: $187, a gap fill at $190.61, and a "slam dunk" shorting opportunity at the $207 level. The lesson is to wait for the highest probability setup, even if it means missing a smaller, less certain move.
NVIDIA: The AI king is approaching a critical juncture. A key uptrend line from the April 7th lows, now around $173-$174, is what Gareth calls "the trend line of all trend lines." A break below this level could be a major catalyst for a broader correction.
Commodities & Crypto:
- Bitcoin: After a bounce from support, the key levels to watch are clear. Gareth noted that a break of $11,800 could lead to a target of $108,000, with the prior topping tail remaining a significant bearish signal.
- Gold: Is pausing near resistance. The $3400 to $3410 zone is a major hurdle. The bias remains to sell into resistance unless it can decisively break out of its wedge pattern.
- Silver: Is consolidating in a potential bear flag pattern, signaling caution after its recent rejection from a major multi-year trendline.
- Oil: The short position remains active, but the price is at support. A break of $65 is needed to open the door to the $60 target.
- Natural Gas: Is fighting to hold a key support level. If it fails, the next potential buying opportunity lies at $2.63.

Conclusion: Learning the Language of the Charts

Today, the market stands at a crossroads, with the S&P 500's gap fill at $6,339 serving as the line in the sand. Beyond this single level, however, lies a deeper truth about navigating the markets. Success isn't found in hot tips or emotional guesses; it's found in discipline, methodology, and a profound understanding of probabilities.

As Gareth concluded:
"The charts are like a foreign text, a foreign language. If we learn to understand them, we're not going to be right 100% of the time, but we can generally know what they mean, aka what the next move is coming."

By learning this language, traders can separate themselves from the emotional herd, identify high-probability opportunities, and build a consistent, logical, and ultimately more profitable approach to the markets.