My Trading Game Plan Revealed - 01/05/2026: Charts Beat Hype: Oil Rally, S&P 500 and Nasdaq Decision Points, AI Sell the News

Over the weekend, a geopolitical earthquake sent shockwaves through the financial world. The U.S. intervention in Venezuela and the arrest of its leader sparked a firestorm of speculation, with a powerful narrative taking hold: a flood of Venezuelan oil was about to hit the market, sending prices plummeting. The hype was deafening, with calls for oil to open below $50.00 USD a barrel. Yet, when the markets opened, reality delivered a stunning rebuke to the narrative. In this morning’s My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, used this event as a powerful, real-time lesson on the core principle that defines his multi-decade career: logic and charts beat hype and narratives every single time.

This article delves into that crucial lesson and applies it across the market landscape. We’ll explore the critical technical patterns forming in the S&P 500 and Nasdaq 100 that signal a major directional move is imminent. We will also dissect the setups in the AI sector ahead of a major industry conference and examine the key levels in commodities and crypto that are defined by data, not by emotion.

The Oil Market’s Masterclass in Hype vs. Reality

The situation in the oil market serves as a perfect case study for the pitfalls of narrative-driven trading. The widespread belief that Venezuelan oil would instantly flood the global supply chain was a classic example of emotional market reaction. As Gareth highlighted, this is precisely the kind of scenario where disciplined, chart-based analysis provides a critical edge.

“If you're one of those people that got caught up in the hype, remember hype is emotion. It's one of the hardest lessons for us all to learn, but that's why I follow the charts, because they give me the best probability of being right.”

Instead of crashing, oil opened flat and quickly turned positive. Why? Because the chart was already telling a bullish story, and a logical look at the fundamentals dismantled the hype. Gareth pointed out three critical facts the narrative ignored:

1. Dilapidated Infrastructure: Venezuela’s oil infrastructure is decades old, comparable to 1970s technology. It will take years, not days, to bring it up to modern standards.
2. The Gatekeepers’ Motives: Who will be in charge of rebuilding this infrastructure? Major oil companies like Chevron and Exxon. It is not in their financial interest to flood the market and crash the price of their own product. They control the spigot and have every incentive to manage the supply to maintain profitable prices.
3. The Chart’s Unbiased Opinion: The chart of U.S. Oil was already forming a constructive pattern—a bull flag inside a larger wedge. This technical formation suggested a breakout to the upside was the higher probability outcome, with potential targets of $65.00-$66.00 USD and possibly even $70.00 USD per barrel.

This event underscores a profound truth: the market chart consolidates all known information, including the "smart money's" understanding of complex situations. While the public was reacting to a headline, the chart was already pricing in the logistical and economic realities.

A Squeeze Is Coming: The S&P 500’s Defining Trend Lines

Shifting to the broader equity markets, a period of immense tension is building. On Friday, the first trading day of the new year, we witnessed a classic institutional maneuver. The market gapped higher on the excitement of new fund flows into retirement accounts, and large institutions used that retail enthusiasm as "exit liquidity" to sell their positions, causing a sharp intraday reversal.

Now, a new and incredibly significant technical pattern is taking shape on the S&P 500 daily chart. By drawing a trend line connecting the low from the April 2025 sell-off through the subsequent major lows, a clear ascending support line emerges. This line, combined with the primary resistance trend line from the 2021 bull market high, is forming a massive wedge. Price is being squeezed tighter and tighter between these two lines, making a powerful breakout or breakdown inevitable.

Gareth explained the mechanics of this pattern: “In technical analysis, the way trend lines work… the more you hit a trend line, the weaker it becomes. Generally, on the fourth or fifth hit, not before, that's when a break can occur.”

This critical support line has now been tested three times: the initial low, a dip in November, and again this past Friday. The next test will be the fourth, bringing the probability of a break significantly higher. Should this trend line break with confirmation, the initial target would be the former all-time highs from late 2024/early 2025. This would represent a substantial decline of approximately 11% from current levels. While a significant bounce would be expected from that support, it would signal the start of a much larger corrective phase.

The Nasdaq’s Parallel Path to a Decision Point

The tech-heavy Nasdaq 100 is exhibiting a strikingly similar, and equally critical, technical setup. Just as with the S&P 500, an ascending trend line can be drawn connecting its recent major lows. A confirmed break below this line would act as the trigger for a significant sell-off.

The potential downside for the QQQ (the Nasdaq 100 ETF) is even more pronounced. A breakdown from current levels would target the highs from early 2025, translating to a drop of roughly 13%.

On the upside, the Nasdaq faces a major resistance level: the former support trend line that it broke below in the previous correction. A rally could take the index up to this line, which would coincide with a new all-time high. However, this would not necessarily be a bullish signal. Instead, Gareth identified this as a potential high-probability shorting opportunity, where the risk-reward is heavily skewed to the downside. The message from both major indices is clear: watch these trend lines, as their resolution will likely dictate the market's direction for months to come.

AI Under the Spotlight: Hype, Hope, and a Potential “Sell the News” Event

The AI sector is buzzing with activity this week as the massive CES conference kicks off in Las Vegas. NVIDIA’s CEO, Jensen Huang, is scheduled to present, and the market is already reacting. We’ve seen upgrades and bullish price action in AI-related stocks, likely in anticipation of positive announcements.

However, this is a scenario ripe for a "sell the news" event. This classic market phenomenon occurs when a stock or sector rallies into a widely anticipated event, only to sell off once the news becomes public. The gains were made on the anticipation, and the event itself becomes a catalyst for profit-taking.

The charts of key AI players are signaling caution.

• NVIDIA (NVDA): The stock is approaching a critical overhead resistance level around $195.00 USD. This is the trend line that previously acted as major support and, once broken, becomes resistance. Until NVIDIA can decisively break above and hold that level, it remains a formidable barrier.
• Taiwan Semiconductor (TSM): TSM is gapping up this morning but is rapidly approaching its own major technical resistance zone around $337.00 USD. While there may be a small amount of short-term upside left, this level represents a wall of sellers where a price rejection is highly probable.

The charts suggest that while the narrative is currently bullish, the big players may be using this CES-driven hype as another opportunity for exit liquidity, just as they did with the broader market on Friday.

The Unbiased Arbitrator: Why Charts Are Your Greatest Ally

In a world saturated with information, disinformation, and algorithmically pushed narratives, finding an unbiased source of truth is paramount for traders. This is the ultimate value of technical analysis.

“The point is, is the charts have no bias when you look at a chart. It's not thinking it wants to fool you. It just is what it is. And if we follow that, we actually have a shot in this game of not being manipulated by institutional money…”

Gareth emphasized that large institutions have billions of dollars and sophisticated operations, including thousands of social media accounts, to push the narratives that serve their interests. They can create hype to sell into or induce fear to buy from panicked retail investors. The chart is the only tool that cuts through this noise. It reflects the pure action of supply and demand, free from emotion or agenda.

The recent action in the crypto market is a testament to this principle. While social media comments were proclaiming that "altcoins are dead," Gareth’s chart analysis pointed to bullish setups with 20-25% upside potential. Over the last week, that is exactly what played out. Bitcoin itself formed a clear bull flag pattern, leading to five consecutive up days and a rally from $86,000 USD to $93,000 USD. The charts provided a clear, logical, and ultimately profitable roadmap that directly contradicted the prevailing emotional sentiment.

Key Levels to Watch in Commodities

• Gold: The yellow metal is bouncing today after briefly dipping below a key trend line. Crucially, the breakdown never received confirmation, reinforcing the importance of waiting for a candle to close below a level before acting. The next major resistance for gold is the descending trend line connecting its recent high pivots.
• Silver: Silver is also seeing a bounce, but its technical picture remains more precarious. It is still trading within the range of a large bearish reversal candle from last week. This choppy, sideways action inside a major down candle is characteristic of a bear flag, suggesting the higher probability outcome is an eventual move lower, unless it can decisively break above last week's high.
• Natural Gas: After a steep drop, natural gas is approaching a highly compelling technical level. A major ascending trend line provides support in the $3.08-$3.10 USD range. Gareth identified this as a zone where he plans to be a heavy buyer. The realistic target for a bounce off this multi-hit support line would be the prior low around $3.50 USD, offering a potential 15% return.

Conclusion: Your Game Plan for Navigating the Noise

Today’s market analysis is a powerful reminder that trading is a game of probabilities, not predictions, and that the most reliable probabilities are derived from charts, not headlines. The emotional hype surrounding the Venezuela news created a trap for those who ignored the data. Meanwhile, the technical patterns forming in the major indices, the AI sector, and key commodities are providing a clear, logical roadmap for what may come next.

The market is being squeezed into a decision point. By focusing on the key trend lines in the S&P 500 and Nasdaq, respecting the major resistance levels in high-flying AI stocks, and identifying high-probability support zones in beaten-down commodities, you can build a game plan based on logic. This is how you avoid being swept up in the hysteria, ignore the institutional manipulation, and position yourself to act decisively when the charts give the signal. As the motto at Verified Investing goes: No BS, just charts.