My Trading Game Plan Revealed - 01/22/2026: Nasdaq Confirms Breakdown, 10-Year Yield Above 4.2% Signals Risk Ahead

The markets continue to navigate a complex landscape of geopolitical headlines, shifting bond yields, and critical technical inflection points. Following a volatile session driven by news regarding a potential framework for a deal involving Greenland and the Arctic—alongside a reprieve on tariffs for eight European nations—stocks staged a rally. However, in this morning’s My Trading Game Plan, Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, urged caution. He emphasized that while headlines can drive short-term sentiment, the technicals remain the ultimate arbiter of truth.

The Tale of Two Indices: Confirmed vs. Unconfirmed Breakdowns

One of the most nuanced and critical lessons from today’s analysis involves the divergence between the S&P 500 and the Nasdaq 100. For novice traders, "the market" often appears to move as a monolith. However, professional analysis requires dissecting the specific technical behavior of each index to determine the probability of future moves.

The S&P 500 recently closed below a major support line, signaling a potential breakdown. However, a breakdown in technical analysis is a two-step process: the initial close below the line, followed by a "confirmation" candle the next day that closes lower than the breakdown candle’s low.

As Gareth noted regarding the S&P 500: "Notice we closed below this major line right here. But notice yesterday we did not confirm the breakdown. So this is an unconfirmed breakdown at this point. Unconfirmed means that probability wise it's not as likely we will continue down as if we had confirmed."

Currently, the S&P 500 is testing a gap fill from two days ago, targeting approximately 6950. This level represents the "scene of the crime"—the point where the unconfirmed breakdown occurred. If the index can recapture this level, the bearish signal may be negated.

In stark contrast, the Nasdaq 100 presents a more bearish picture. The tech-heavy index did confirm its breakdown, closing below the prior day's low following the breach of its trendline. In the world of probability-based trading, this distinction is vital.

"Once confirmation occurs, the odds go up that that is the next directional move that we're generally going to go to about 75 plus%. So, it's a pretty high probability at that point."

This divergence creates a treacherous environment. While the S&P 500 clings to hope via an unconfirmed break, the Nasdaq’s confirmed breakdown suggests that the path of least resistance for technology stocks remains lower. Traders must watch to see if the Nasdaq can reclaim its trendline or if it drags the broader market down with it.

The Bond Market Vigilantes and the 4.2% Line in the Sand

The relationship between the bond market and equities remains the primary driver of macro flows. Yesterday’s market action was heavily influenced by the 10-year Treasury yield, which initially spiked on fears that foreign nations might dump U.S. Treasuries in response to aggressive trade policies.

When foreign entities sell Treasuries, supply floods the market. To attract buyers for that excess supply, yields (interest rates) must rise. Rising yields act as gravity on equity valuations, particularly for growth stocks, by increasing borrowing costs and offering a risk-free alternative to stocks.

Technically, the 10-year yield has crossed a Rubicon. It has confirmed a close above the 4.2% level. In technical analysis, when resistance is broken and confirmed, it becomes support.

"That means this 4.2% becomes major technical support and the path of least resistance on the 10-year yield is this direction [up]. And again, that is not a good sign."

Even with the slight pullback in yields yesterday, the trend remains upward. Unless yields can break back below and confirm under 4.2%, the pressure on the stock market will persist. This dynamic serves as a "check engine" light for the rally, suggesting that the underlying structure of the market is more fragile than the green on the screen might imply.

Earnings Psychology: Location, Location, Location

A recurring theme in My Trading Game Plan Revealed is that earnings numbers matter less than where the stock is trading when those numbers are released. This concept was perfectly illustrated this morning by the divergent reactions in General Electric (GE) and Procter & Gamble (PG).

GE: Priced to Perfection

General Electric has been on a vertical tear, rallying consistently since 2022. When a stock chart goes parabolic, market expectations skyrocket. The stock becomes "priced to perfection," meaning that even excellent earnings may not be enough to sustain the valuation.

GE reported great numbers, and the algorithmic traders initially spiked the stock. However, reality quickly set in. The stock, which closed yesterday around $318, dropped to trade around $305.

"This is a chart. When I look at it, I say, 'Wow, they better knock the cover off the ball’… because anything slightly not that good, let's say even a neutral point, is going to bring the stock down when it's priced to perfection."

Procter & Gamble: The Defensive Value Play

Conversely, Procter & Gamble went into earnings trading near its lows. Sentiment was bearish, and the price reflected low expectations. When PG reported solid numbers, the stock rallied. Why? Because the bad news was already priced in, leaving room for upside on merely "good" news.

Gareth identified a potential breakout level for PG between $148 and $150. If the stock can clear this zone, it could signal a broader rotation into defensive staples, a common occurrence when investors grow wary of high-flying tech valuations.

The Government "Put" vs. Innovation: Intel's Dilemma

Intel (INTC) is set to report earnings after the bell, and the setup is complicated by government involvement. With the U.S. government now holding a stake in the company, Intel operates under a different set of rules than its competitors.

From a trading perspective, this creates a "floor" of sorts—Intel is likely to receive government contracts regardless of whether its technology is superior. However, from a fundamental and long-term perspective, this intervention can be toxic to innovation.

"The idea is the best should prevail. And the question is, is Intel… does Intel have the best chips? … Ultimately again they've been favored, they've been blessed by the US government with the investment and therefore they will be treated differently."

Technically, Intel is trading up into a confluence of resistance zones, making it overbought in the short term. However, the "government put" adds a layer of unpredictability to the trade, as standard market mechanics are distorted by political favoritism.

Technical Patterns: Head and Shoulders and Parabolic Pullbacks

Beyond the earnings headlines, several pure technical setups are developing that traders should monitor closely.

Dell: A Bearish Head and Shoulders

Dell has formed a classic head and shoulders pattern, a reliable bearish reversal formation. Despite the stock already falling significantly from $170 to $115, the pattern suggests more pain ahead.

"The pattern is the pattern. Shoulder, head, shoulder. You do a measured move and it gives us an eventual $67 target on the chart of Dell."

This target implies a drastic repricing for hardware and data center stocks. The bearish thesis remains active unless Dell can negate the pattern by closing back above approximately $119.

CCJ (Cameco): The Gravity of Vertical Moves

Cameco, a uranium miner, has surged from $99 at the end of 2025 to $125 in just three weeks—a 25% gain. While the long-term thesis for uranium may be bullish, the short-term chart is extended. Historical analysis of CCJ shows that after hitting its current trendline, the stock frequently experiences corrections of 20% to 30%.

This serves as a reminder that even in strong bull markets, buying extended charts is a low-probability strategy. Waiting for the inevitable pullback to support improves the risk-reward ratio significantly.

Natural Gas: The "Rip Your Face Off" Rally

Natural gas has staged an incredible rally, pushing back above $5. This move exemplifies the danger of crowded short trades. When too many traders bet on the downside, a reversal can trigger a short squeeze that defies logic.

"You get people that are offsides… and then the rip-your-face-off rally squeezes them and ultimately goes up."

However, trees don't grow infinitely to the sky. Gareth initiated a short position in natural gas today, citing a double top and a three-bar surge. The technical target for a pullback is the $4.60 level, where the price would return to a more sustainable equilibrium.

Conclusion: Caution Amidst the Noise

As we look ahead, the market faces a gauntlet of catalysts. Jobless claims remain low at 200,000, signaling a labor market that is not yet cracking, which keeps the Federal Reserve in a tight spot regarding interest rates. We are also awaiting Supreme Court rulings and the onset of mega-cap earnings next week.

Despite the green on the screen today, the "North Star" of technical analysis points to caution. The confirmed breakdown in the Nasdaq, the resilience of the 10-year yield above 4.2%, and the precarious position of the S&P 500 all suggest that risk management should be the priority.

By ignoring the hype of headlines and focusing on the logic of charts—specifically confirmed vs. unconfirmed levels and the probability of mean reversion—traders can navigate this volatility with a clear head. As Gareth reminded viewers, "Logic and charts beat hype and narratives every time."