TRADING GAME PLAN REVEALED: Google Ruling Lifts Markets, Key Breakdowns Loom

The stock market is a complex arena of conflicting signals, and rarely has this been more apparent than now. After a weak open and early flush yesterday, markets were saved by a late-day rally, only to be given another boost after hours by a pivotal court ruling. This decision, seemingly a blessing for Big Tech, has propped up the major indices, yet beneath the surface, critical technical patterns are flashing warning signs. In this morning's TRADING GAME PLAN REVEALED, Gareth Soloway, Chief Market Strategist at Verified Investing, dissected this complex environment, revealing the key levels and divergences that will likely dictate the market's next major move.

A Judicial Lifeline for Big Tech

The market's saving grace arrived after the closing bell yesterday in the form of a judicial decision. As Gareth bluntly summarized, the ruling effectively declared that "monopolies are totally okay. They're okay, no big deal. Uh, Chrome is allowed to stay with Google." This news sent shares of Alphabet (GOOGL) soaring from a close of $211 USD all the way to nearly $230 USD in the after-hours session—a monumental move for a trillion-dollar-plus company.

The ripple effect immediately hit Apple (AAPL), which also rallied on the news. The logic is clear: if Google's integration of its products is permissible, then a precedent is set that could shield other tech giants, like Apple, from similar antitrust scrutiny. This is more than just a legal victory; it's a strategic game-changer. For years, Apple has been sitting on a cash hoard of over one hundred billion dollars, yet has been hesitant to make a major acquisition in the artificial intelligence space, likely due to fears of regulatory roadblocks.

As Gareth explained, this ruling potentially unleashes Apple's M&A power. "Now if they can use let's say $50 billion and go buy a legit AI company and it won't be blocked by antitrust rulings. Now you're talking about some upside potential." This addresses one of the key narratives that has caused Apple to underperform its peers: a perceived lag in AI development. The market is now pricing in the possibility of Apple buying its way to the forefront of the AI race. The combined strength of these two mega-cap stocks is acting like a massive flotation device, lifting the entire market at the open.

Decoding the Great Divergence: S&P 500 vs. NASDAQ 100

While the headline indices appear buoyant, a critical divergence is forming between the broader market and the tech sector. The NASDAQ 100, home to the largest technology companies, has shown relative weakness. Yesterday, it registered its first significant daily close below a key up-sloping parallel channel that has guided its ascent. The S&P 500, however, was saved. After dipping below its own crucial trendline during the day, a late rally pushed it to close right back on that line of support.

This technical divergence tells a story of capital rotation. "This continues to show us that the NASDAQ, the tech sector is a little weaker than the S&P," Gareth noted. "In other words, people are rotating capital out of the NASDAQ and into the S&P, basically getting a little bit less aggressive, at least institutional money."

Historically, such divergences often precede major market shifts. When institutional investors begin to favor the 500 diverse companies of the S&P over the concentrated growth bets of the NASDAQ, it signals a de-risking sentiment. While the Google and Apple news is providing a temporary, concentrated lift, the broader technical picture for tech is showing cracks. It is crucial to remember, as Gareth emphasized, that the NASDAQ breakdown has not yet been confirmed. A single close below a trendline is a warning, not a verdict. The market needs to see follow-through selling to confirm that a new downtrend is underway. The price action over the next few days will be critical in determining whether this is a false signal or the start of a more significant correction in tech.

Pinpointing Precision Setups in Google and Apple

The overnight news has created immense volatility and opportunity in the market's two largest players. However, disciplined traders know that chasing parabolic moves is a losing game. Instead, Gareth outlined precise, multi-factor levels where risk and reward become favorable.

For Alphabet (GOOGL), the rally is pushing the stock directly into a confluence of technical resistance. A trendline connecting the lows from September and November of 2024, combined with a secondary trendline on the logarithmic chart, creates a powerful resistance zone between $227 USD and $230 USD. Rather than shorting into the strength, Gareth's game plan involves waiting for a moment of peak irrationality. "What you're looking for is at the open short covering... and panic buying, basically irrational exuberance," he explained. The ideal entry is a spike, or "pierce," above the true resistance. "That gives me the opportunity to short at $230 pierce and capture that $3 pullback on an intraday trade on Google/Alphabet."

A similar multi-factor setup is materializing on Apple (AAPL). The stock is rallying towards a zone packed with resistance around the $251-$252 USD level. This price point represents the convergence of three distinct technical factors: a parallel channel line, a secondary trendline connecting lows from 2024 and 2025, and a former gap fill from a previous decline. When multiple, independent technical indicators point to the same price level, the probability of it acting as significant resistance increases dramatically. As Gareth stated, "that to me really stands out as a multi-fold resistance line on Apple where if it goes to that, there should be significant resistance." This is not a signal to go long; it is a pre-identified zone to watch for a potential reversal and a high-probability short trade.

The Semiconductor Bellwether: A Pattern on the Brink

Perhaps the most important chart for the health of the entire market right now is the VanEck Semiconductor ETF (SMH). This ETF is tracing out a classic, bearish Head and Shoulders pattern—a formation that often signals a major trend reversal. Yesterday, the SMH briefly dipped below the pattern's "neckline," the critical trigger point for the breakdown, at approximately $283 USD.

Like the S&P 500, it was saved by the late-day bounce and closed back above this level. The danger, however, has not passed. "Head and shoulder patterns are bearish signals, but they don't trigger until the neckline breaks," Gareth cautioned. "You need to see a daily close below that neckline to trigger it."

If the SMH does close below $283 USD on a daily chart, the pattern will be confirmed, and technical analysis provides a calculated downside target. The measured move for this pattern points to a potential decline to the $261 USD level. As semiconductors are the lifeblood of the tech industry and a key leading indicator for economic growth, a confirmed breakdown in the SMH would send a powerful bearish signal across the entire market.

Beyond the Headlines: JOLTS Data and the Bitcoin Canary

Today at 10:00 AM, the JOLTS (Job Openings and Labor Turnover Survey) data will be released. While typically a secondary indicator, it provides a snapshot of the labor market's health. Gareth expects a relatively strong number, but with a significant asterisk. Recent data shows that 1.2 million immigrants have left the workforce, which could be artificially inflating the number of job openings without reflecting true underlying economic demand. The more important labor market data will arrive on Thursday (ADP) and Friday (Non-Farm Payrolls).

Meanwhile, an intriguing leading indicator may be emerging from the cryptocurrency space. "I continue to think that Bitcoin has become more and more of a leading indicator," Gareth mused. He pointed to the 2021 market cycle, where Bitcoin topped out weeks before the stock market did. More recently, Bitcoin's peak on August 14th preceded the stock market's top by about three weeks. Yesterday, Bitcoin caught a bid and bounced; today, the stock market is gapping up. While not a perfect correlation, it's a nuance worth monitoring. As Gareth puts it, "if it can give me an edge even a fraction of an edge, then it makes me a better investor, a better trader and more profitable." For now, Bitcoin faces minor resistance around $112,000 USD, with a major long-term support level and potential target at the psychological $100,000 USD mark.

Conclusion: Navigating a Market of Crosscurrents

Today's market is a textbook example of conflicting forces. A powerful, news-driven catalyst is lifting a few mega-cap stocks, masking underlying technical weakness in the broader tech sector. While the S&P 500 and the SMH have been saved at critical support for now, the NASDAQ 100 has already fired a warning shot by breaking its primary uptrend channel.

This is an environment that demands patience and discipline. The key takeaway from today's game plan is the importance of waiting for confirmation. A break of a trendline is not a confirmed breakdown until follow-through selling occurs. A rally into resistance is not a short until price action confirms rejection. By identifying key multi-factor levels in advance and patiently waiting for the market to reach them, traders can avoid chasing emotional headlines and instead position themselves for high-probability opportunities, navigating the crosscurrents with a clear and logical plan.